Options for Health Insurance at 60 Years Old

The best health care available anywhere in the world is offered in the U.S., but it is costly. For individuals under 65, the system depends on the private insurance company system to pay the bills. While most Americans have some type of coverage until age 65, a sudden coverage loss is frightening, particularly for those aged 60-64. But there are several options.

Significance

• Health care debates often focus on those without health insurance. While most Americans have insurance, a significant minority go without, and increasingly those without are the young and healthy, and those 60 years and older. Medicare coverage does not begin until age 65. The significance with the older group is cost---they are older and more likely to make health claims, hence insurance companies charge higher premiums. And to go it alone without health insurance may lead to financial calamity. The cost of hospitalization and treatment can easily bankrupt individuals, even those in the upper middle class.

Group Insurance

• Most working Americans are covered by group plans though their employer. The risk is spread among many people enabling lower insurance rates. Most employers pay a significant portion of the premium; some even pay 100 percent. As long as a person age 60 and above works for one of these companies, they are covered, and many do. It is the most affordable way. Many companies also extend group coverage for their early retirees. For independent contractors such real estate agents, group plans may also be offered. Additionally, some professional organizations offer group coverage, as do alumni associations, although the insured is responsible for the entire premium.

Individual Policies

• Persons aged 60 and above are also eligible for individual policies, meaning the policy covers only one individual. The downside is cost since there is no risk pool, and insurers charge premiums based on age. Since older people have a higher risk of illness, rates are high. However, there are options that can contain cost such as exclusive major medical coverage and high deductible coverage. In the former, routine medical costs are not covered, and insurance only pays for major hospitalizations and treatment. High deductible polices are similar and pay only after the patient has incurred a certain amount of out-of-pocket expenses. In addition, many companies will not issue individual policies if the person has certain pre-existing conditions, such as diabetes. Such individuals may usually obtain insurance via a state-sponsored high risk pool, although the rates are high.

Other Options

• Persons receiving benefits from the Pension Benefit Guaranty Corporation can apply for state-sponsored insurance, and the government will apply a tax credit of 80 percent to help pay the cost. Individuals on Social Security disability may apply for Medicare benefits even if they are under 65. For low income persons, states offer Medicaid programs that do not require a premium. Some localities provide free health care at public hospitals, including outpatient services.