When the Covid pandemic first hit the US in 2020, many people living in North Carolina and across America who had planned to wait until reaching 65 to retire reexamined their plans. Some people found that businesses they had grown from the ground up were suddenly struggling to make ends meet. Others discovered their hours cut and occupations furloughed. Regardless of the specific reason, many people began to consider early retirement.
Although some people considering an early retirement have managed to establish themselves financially to ensure a comfortable retirement, many people have seen their retirement plans change significantly due to Covid and are not as financially secure heading into retirement.
According to Teresa Ghilarducci, a New School for Social Research professor of economics and policy analysis, most people considering early retirement due to the pandemic have much more modest means when exiting the workforce.
That means many people entering early retirement are taking a conservative approach to spending, to help make their money last for their retirement years. This includes recognizing the impact of long-term costs like healthcare. Organizing affordable health insurance plans in North Carolina can be essential to work out your budget in retirement. More importantly, the right level of insurance can protect your most important asset, your health.
If you’re leaving a job where your employer helped cover some or all of your insurance premiums, it’s not surprising if you’re concerned about how you’ll pay for your health insurance coverage in retirement. Employer-sponsored health insurance plans are a significant employer benefit that many people look for when applying for jobs. Paying for your own insurance premiums can be expensive depending on your plan. Your monthly premium costs vary depending on where you live, how old you are and what type of coverage you need. So it’s essential to consider North Carolina health insurance and speak to an expert if you need some guidance.
Since most people lose their health insurance coverage when their employment ends, it’s important to consider how you’ll provide for your health care needs in retirement. To help you secure insurance coverage at a price you can afford, it’s good to consider your early retirement health insurance options before you retire.
Your coverage options may include:
COBRA: Just as when you leave one job to move to another, you may be eligible for COBRA, or continuation coverage, if you face early retirement. If you choose to continue your insurance through COBRA, you will be required to pick up the total cost of your health insurance plan costs, but you can continue for a period of time (usually 18 to 36 months) to obtain your health care coverage under the plan your past employer established.
Your spouse’s health insurance: Assuming you’re married to a partner with an employer-sponsored health insurance plan, the simplest and often most cost-efficient choice will be to have them add you to their existing health insurance plan.
Retiree health insurance benefits: If you have worked in a union or in a highly valued occupation, you may have access to what is referred to as retiree health insurance through your past employer, your union, or, in some instances, an established trust. This plan is generally a group health insurance plan established specifically to support employees and their spouses in retirement.
Health Insurance Marketplace coverage with a subsidy: If you fall between 100 and 400% of the federal poverty limit, you can find some health insurance plans through the Marketplace that give you a governmental subsidy, regardless of which state you live in. If you choose to go this route, you should understand which plans allow you to use a subsidy. Even if you qualify for a government subsidy, they are only available on some plans.
Private insurance without a subsidy: Obviously, you can always buy your health insurance plan from a private agency. However, you should be clear that there are no governmental subsidies available to you if you choose this option. If your pandemic stock strategy has placed you outside of the federal subsidies, there are plenty of options available to you from private insurance agencies.
Short-term insurance plans: If you are looking for an insurance plan to get you over a short stint, you may wish to consider a short-term plan. You are going to want to make sure, however, that you understand that these plans often fail to cover preexisting medical conditions. Also, if you have a history of complex medical issues, you can be turned down for these types of plans.
The best health insurance plan for you depends on what NC health insurance will best meet your needs. The below three steps are an excellent place to start when considering your options.
Understand how much you want to spend and the level of coverage you’d ideally like to have. For some people, this can mean looking for a low-cost health insurance option that falls within your monthly budget and offers very basic coverage. If that’s the case, you may want to consider buying your insurance plan through the Health Insurance Marketplace. Even if you have failed to meet the criteria for subsidies here in the past, you may meet the requirements this year. As part of the American Rescue Plan Act of 2021, tax credit subsidies were increased and extended to cover individuals with higher income levels than were covered in the past.
Consider your options carefully
If you qualify for insurance coverage through your spouse’s company, it’s unlikely you will be eligible for a government subsidy through the Marketplace. However, it’s still important to compare your health insurance options. If you’re choosing between having your spouse add you to their plan or using a COBRA plan, it’s likely to be less expensive to have your spouse put you on their plan. This option may be more cost-effective than either a COBRA plan or plans you can acquire through private insurance companies. When choosing, remember to compare all costs of the individual plans and not just the cost of your monthly premiums. Get a good understanding of all copayments, deductibles, and the out-of-pocket maximums associated with each of the plans you are considering.
If you find you don’t qualify for a subsidy through the Health Insurance Marketplace, and the other options are too expensive, consider a short-term insurance plan. This can be a good option if you’re in good health and are only waiting a short time to become eligible for Medicare coverage. However, be aware these plans aren’t required to provide the minimum essential benefits required by the Affordable Care Act (ACA). This means that your preexisting conditions are unlikely to be covered. Some of the medical concerns covered under the plans offered to you in the Health Insurance Marketplace may not be covered in your short-term plan. SEE ALSO: How Medicare Agents Get Paid, How Medicare And Employer Coverage Works, When & How to Tell Your Insurer About Life Changes
Sometimes selecting the right health insurance coverage can be overwhelming, particularly if you’re retiring early. It can be helpful to talk to a local health insurance agent who can help you work out your options. Our NC health insurance agents can discuss your budget and talk you through the various early retirement health insurance options available to you. Contact us today to find out more.