Health Insurance Options for Seniors

Unique health care concerns come with advancing age. Obtaining health insurance can be difficult if you retire before age 65, lose your employer-based insurance, but are not yet eligible for Medicare. Even if you qualify for Medicare, there are still choices to make and you may need additional coverage. Choose carefully so you will be covered for the care you need, without hurting your retirement fund.

Medicare

• Once you reach age 65, you will automatically qualify for Medicare. You will then have choices to make about what type of Medicare to receive. You will automatically receive Part A, or traditional Medicare, which covers hospital expenses. You have the choice to pay for Medicare Part B, which covers doctor bills. If you want Medicare Part B, the premiums will be deducted automatically from your Social Security income. The cost came to about $90 a month in 2010. Your second choice is to enroll in Medicare Part D, prescription drug coverage. Not all private insurers administer Medicare Part D, so contact an insurer to determine availability and cost. You can enroll in Medicare Part D anytime between November 15 and December 31.

Gap Coverage

• As of 2010, there was a gap in Medicare coverage known as the "donut hole." It means Medicare covers less than half the total health care costs for the average recipient, according to Shi and Singh. The patient is responsible for any expenses in that cost range. The health care bill passed in 2010 has provisions to close this gap, but they will not come into full force until 2020. Meanwhile, to cover these costs, many private insurance companies offer Medigap insurance. Contact a private insurer to determine availability and cost of these plans.

High-Deductible Plans

• It can be difficult to afford health insurance if you are between the ages of 60 and 65. Health insurance premiums increase with age because you are more likely to need benefits. High-deductible insurance plans are one option to lower your premiums without sacrificing catastrophic coverage; higher deductibles mean a lower premium.

Long Term Care

• Medicare does not current cover long term care, and Medicaid will only cover it once you meet federal poverty guidelines. The 2010 health care bill introduced an optional program for long term care. In 2011, people have the option to make payments into the program. To be eligible for benefits, you must make payments for five years and be employed for three. If you are already retired, you may want to look into long term care insurance. Keep in mind that premiums tend to be high, particularly if you get a policy after age 60.