Orlando Harmon
Health insurance for older adults can be expensive, and there are many options to consider. Medicare is a federal health insurance program for people aged 65 and over, but those who retire before 65 may need to bridge the gap with other insurance plans. The Affordable Care Act (ACA) has made health insurance more accessible and affordable for older people, and there are various low-cost coverage options available, such as Medicaid, COBRA, short-term insurance, and marketplace plans.
| Characteristics | Values |
|---|---|
| Eligibility | 65 years or older, or those with a qualifying disability |
| Options | Original Medicare, Medicare Advantage, Medicaid, COBRA, short-term insurance, marketplace insurance |
| Cost | Varies; Medicare is the cheapest option with the best benefits for those eligible |
| Coverage | Varies; Medicare covers 99% of doctors in the country |
| Enrollment Period | Special Enrollment Period outside of the yearly Open Enrollment Period (November 1 – January 15) |
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What You'll Learn
Medicare
Original Medicare
Original Medicare is run directly by the government and includes Part A (hospital insurance) and Part B (medical insurance). With Original Medicare, you can get care from 99% of the doctors in the country. On top of Original Medicare, you can add extra coverage from private health insurance companies through a Medicare Supplement plan (also called Medigap). This lowers the portion of medical costs you pay from 20% of the bill to nearly 0%. Another add-on is a Medicare Part D plan for prescription drug coverage, which is your only way to get prescription drug insurance with Original Medicare. You'll pay a premium for Part B coverage every month, and the monthly premium can change each year and may be higher depending on your income.
Eligibility
If you are 65 or older and you (or another qualifying person, like your current or former spouse) paid Medicare taxes while working for a certain amount of time (usually at least 10 years), you are eligible for Medicare. If you don't qualify for premium-free Part A, you might be able to buy it. If you don't have to pay a premium for Part A (Hospital Insurance), you can choose to sign up when you turn 65 or anytime later. If you have group health insurance available to everyone at your company, you can wait to sign up for Medicare without paying a late enrollment penalty. However, if you don't sign up for Part A and Part B when you turn 65, your job-based insurance might not cover the costs for services you get. If you are self-employed or have health insurance that is not available to everyone at the company, you should sign up for Medicare when you turn 65 to avoid a monthly Part B late enrollment penalty.
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Medicaid
Seniors aged 65 and over who earn too much to qualify for Medicaid based on income alone may still be eligible if they have high medical costs. The Medicaid spend-down programme allows individuals to subtract their medical costs from their income to qualify. Additionally, individuals who are enrolled in Medicare and have limited incomes and resources may receive assistance in paying their premiums and out-of-pocket medical expenses from Medicaid.
To apply for Medicaid, individuals can visit HealthCare.gov or call the Marketplace Call Center at 1-800-318-2596. They will be informed of their eligibility for Medicaid or other savings and coverage options.
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Short-term insurance
Short-term health insurance is a good option for people over 60 who are not yet eligible for Medicare. Short-term medical insurance is a temporary solution, usually lasting a few months up to a year, and can be renewed for longer coverage, depending on where you live.
If you are 63 years old and looking for short-term insurance, you can explore various options through the Health Insurance Marketplace, which was created by the Affordable Care Act (ACA). The ACA has capped rates at no more than three times the cost for a 21-year-old, to keep insurance costs in check for older individuals. Through the Health Insurance Marketplace application process, you can determine if you are eligible for Medicaid or qualify for premium tax credits, which can help reduce monthly premiums.
Medicare is the cheapest health insurance with the best benefits for people aged 65 and older.
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COBRA
Eligibility for COBRA coverage is based on specific criteria. It applies to private-sector employers with 20 or more employees, although some states have similar obligations for businesses with 19 or fewer employees. Federal employees are not covered under COBRA but may have similar rights under separate federal laws, such as the Federal Employees Health Benefits (FEHB) program.
The cost of COBRA insurance is an important consideration. Individuals are typically required to pay the full cost of their health insurance premium, previously covered by their employer, plus an administrative fee of up to 2%. Monthly premiums can range from $400 to $700 per individual, depending on the plan and coverage.
To enrol in COBRA, individuals must receive an election notice from their employer within 45 days of the qualifying event. They then have 60 days to choose to enrol in the health plan. The first premium payment is due within 45 days of enrolment, and coverage is retroactive, ensuring no gaps in coverage.
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Marketplace plans
If you are 63 years old and need medical insurance, you can consider a Marketplace plan. The Health Insurance Marketplace was created by the Affordable Care Act (ACA) to help you find health coverage that fits your needs and budget. Every health plan in the Marketplace offers the same set of essential health benefits, including doctor visits, preventive care, hospitalization, prescriptions, and more.
Marketplace insurance plans provide various coverage levels and premiums for retirees under 65. The ACA has capped rates at no more than three times the cost for a 21-year-old to keep insurance costs in check for older individuals. This means that a Marketplace plan for a 63-year-old will be significantly more affordable than one for a 65-year-old or older.
Through the Health Insurance Marketplace application process, you can determine if you are eligible for Medicaid or qualify for premium tax credits. Premium tax credits can help you reduce your monthly premiums and typically apply to households with incomes between 100% and 400% of the federal poverty level (FPL). Additional savings are available through cost-sharing reductions for those with incomes between 100% and 250% of the FPL, particularly on a Silver plan, which lowers deductibles, copayments, and out-of-pocket maximums.
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Frequently asked questions
Medicare is the cheapest health insurance with the best benefits for people aged 65 and older. However, there are several options for retirees under 65, including COBRA, short-term insurance, Medicaid, and marketplace plans.
COBRA is a Consolidated Omnibus Budget Reconciliation Act coverage plan. It is usually expensive as the insured party will likely have to pay the entire cost of the insurance policy themselves, plus an administrative fee. However, it can be a good option for those who are close to turning 65 and becoming eligible for Medicare.
Short-term insurance is a temporary plan, usually lasting a few months up to a year. These plans are less expensive than ACA plans but do not cover pre-existing conditions or all the essential health benefits that ACA plans do.
Medicaid is a joint federal and state program that provides free or low-cost health coverage to Americans, including low-income people, families, children, pregnant women, the elderly, and people with disabilities. Income limits for Medicaid vary depending on the state.
The Health Insurance Marketplace was created by the Affordable Care Act (ACA) to help people find health coverage that fits their needs and budget. Marketplace plans are more accessible and affordable for qualifying seniors.
