First Boomers Face Health Insurance Challenges in 2008

6/24/2008

As the first of the Baby Boomers turn 62 in 2008, they will face the challenge of finding health insurance to meet their early retirement needs during the gap from 62 to 65 years of age when they are not covered by Medicare.  If you are in this group, whether or not you retire or keep working, you will need coverage.  In 2005, only 12.5% of non-government employees retiring before 65 were covered by their former employers.  That figure is down from 21.6% in 1997 according to the Employee Benefit Research Institute.  These numbers will continue to shrink as we all grow older and employers cannot afford to pay benefits on retirees.  As we reach the early retirement age of 62, we look forward to our benefits from Social Security; however, Medicare is not available until age 65.  As you age, it is likely that you will face more illnesses or accidents and these occurrences can put a crack or even a large hole in your nest egg. 

If you are lucky enough to be in the group that has continued coverage from your employer then there is no need for you to continue reading, but if you are not in this group you will need to check out the options.  First is COBRA which requires your former employer to allow you to stay with the group for a period of 18 months after retiring.  The Catch 22 is that your company must employ at least 20 people.  This option can be expensive as you will have to pay for the entire premium and administrative costs.  Second, if you seek another job or part time employment and work 24 hours per week, you are eligible for health benefits from your new employer.  Third, you can get coverage through your spouse’s group health plan or by joining associations or organizations that provide group coverage.  Your final option is to seek out coverage on your own through an Oklahoma authorized agent such as John R. Krogh, AASK Insurance. 

AASK Insurance can assist you with a comparison of rates and benefits with many A rated companies.  John states, “You have to be careful when shopping for health insurance due to the fact that prices and benefits vary so greatly from one company to the other”.   John will spend the time to listen to his customers’ needs, offer free consultations, and will provide access to a “real person”.  AASK is not just a web site or a recording on the telephone which can cause a lot of frustration to the person who needs questions answered.   AASK Insurance does not charge the customer a service fee either. 

In the state of Oklahoma, the city that you are living in when you retire will determine the plans that are available to you.   Naturally, in larger cities there are more options available than in smaller rural areas; however, John can work with you and guide you to the best plan and PPO (Preferred Provider Organization) networks available in your area.

According to John, “If you are 62 and healthy, you may be able to find better individual rates than you can with a group plan because there is less risk”.   An example would be a high deductible plan which keeps your premiums about 10% lower than traditional health insurance.  This plan requires the individual to pay all health care costs up to the deductible and then the plan pays 100% of allowable costs.  When purchasing this high deductible plan you become eligible to set up a HSA (Health Savings Account) at your local bank or credit union which will save you tax dollars as a direct write off of your income each year.  You will save money on both federal and state taxes.  By taking the 10% savings from a traditional health plan and investing it each month into the HSA, you now have money to pay for day to day out of pocket health expenses.  Monies put into the HSA are not lost to you and can be used at retirement.  Also, these monies grow at a tax free rate.

When you reach age 65 you will be eligible to receive Medicare.  Did you ever think that you would look forward to attaining the age that explains all those “senior moments”?

To contact John Krogh and AASK Insurance go to aaskinsure.com or call at 888-357-4501 toll free.  John and his staff look forward to helping you with your insurance needs and questions.