Risk Management

Health Insurance

Under Age 65

Most people get their health insurance from work. After retirement, that can be a problem, unless the former employer offers continued coverage. Retirees age 65 or older typically can qualify for Medicare, which is discussed below. The years between retirement and age 65 can pose a problem for health insurance. Some retirees will have a spouse who still works at a firm that offers a family health plan. In that situation, retirees may get coverage through the spouse’s employer until reaching 65. Even at age 65, when Medicare is available, an employer’s health plan might be more desirable.

Without access to an employer’s health plan, retirees younger than 65 will have to shop for coverage. One option is to look for coverage on the Affordable Care Act (ACA) exchanges. As of this writing, the ACA enrollment period runs from November 1 to December 15, for coverage in the following calendar year. Subsidies to help with premium payments may be available to retirees with low and moderate incomes.

Besides the government exchanges, there are private exchanges for health insurance. Retirees who don’t qualify for ACA subsidies might find coverage there, at a reasonable price. Again, choosing among health insurance policies can be daunting. Some life insurance agents can help with policy selection, while there also are agents who specialize in health insurance.


When seniors reach age 65, they usually become eligible for Medicare, the federal government’s health care plan. Often, Medicare is a welcome choice for retirees who can’t get coverage from an employer-sponsored plan. For new participants, open enrollment for Medicare starts three months prior to the individual’s 65th birthday and stays open until three months after that birthday. Seniors should apply for Medicare as soon as they are eligible, as waiting may permanently increase the cost of monthly Medicare premiums.

Medicare Part A, which covers hospital insurance, is included when applying for Medicare. However, Medicare Part B, which covers medical services or supplies that are needed to treat medical conditions as well as preventative services, is a separate enrollment process. There are also other Medicare decisions that need to be made. For instance, Medicare enrollees might choose original Medicare. They also might feel the need to buy a “Medigap” supplemental plan. Otherwise, Medicare participants can elect a Medicare Advantage plan. With Medicare Advantage, the cost of a Medigap insurance policy can be avoided.

With original Medicare, seniors get to choose their doctors and hospitals that accept Medicare. However, original Medicare has coverage gaps. Enrollees in original Medicare typically will be responsible for 20% of the Medicare-approved amount for expenses such as doctors’ charges and outpatient procedures; they’ll also be responsible for the costs of prescription drugs. Such costs might reach thousands of dollars a year. To fill the gaps, retirees can turn to Medigap policies as well as to Medicare Part D prescription drug plans, both offered by private insurance companies.

Medicare Advantage plans, sometimes known as Medicare Part C, also come from private companies. These plans usually cover Medicare Part B charges, such as doctors’ bills and other outpatient services; they also may include prescription drug coverage under Part D. Medicare Advantage fees and features vary widely, so shopping around can pay off. Typically, the overall cost of a Medicare Advantage plan will be lower than the cost of buying a Medigap policy, if a patient stays in the plan network. However, overall costs of a Medicare Advantage plan (including copays and any monthly charge) should be compared with the local costs of Medigap.

Some people choose original Medicare and a Medigap policy because their area lacks a good, affordable Medicare Advantage plan. Medigap policies range from Plan A to Plan N.

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