Medicare: This is the health insurance that many people rely on when they hit traditional retirement age as it is supplemented by the government. Many people make the mistake of thinking it won’t cost them anything like Medicaid, but it does. Still, this is likely to be the most affordable insurance coverage that you’ll have access to during retirement. Depending on the year, you could pay anywhere between about $150 and $600 per month for your premiums. This will depend on what your yearly income is. Medicare plans also have a deductible, and certain expenses like hospital stays could cost you more.
Private Health Insurance: You can buy health insurance coverage directly from a broker but this will likely be your most expensive option when you’re looking at retirement ages between 60 to 90. Many companies have options specific to retirees but these plans are generally focused on pre-Medicare-aged individuals. You will likely pay more for these plans than you’re currently paying for an employer-sponsored plan since you won’t have a company that is subsidizing your insurance.
Employer-Sponsored Insurance: Many businesses have a retirement insurance plan for employees that have worked for them for a very long time prior to retirement. You could buy into this plan and receive something similar to what you’ve been receiving when you were working at the company. There may be some changes that include you paying a little bit more of the premiums on a monthly basis or less coverage for things like hospital stays. Another option is that you could work part-time for a business that offers health insurance to part-time employees.
COBRA: When you retire you also have the option to continue with your exact same insurance through your employer for up to 18 months through COBRA. Your premiums will increase as you’ll be paying what you were paying previously plus the employer portion of your premium. This could be a good, but expensive option to bridge the gap between retirement and Medicare eligibility.
Insurance Marketplace: Similar to the private health insurance option, you can buy a plan on the marketplace on a state or federal exchange since you will no longer be covered or offered insurance by an employer. These plans are typically a bit more affordable than buying private insurance but you have to pay close attention to what each plan covers and doesn’t before agreeing to buy insurance. If you don’t have a large amount of income then you could also qualify for tax credits to help pay for coverage.
Insurance From a Spouse’s Workplace: If you’re older than your spouse and they are still working then getting access to their health coverage could be an option. This could be a good opportunity to bridge the gap to Medicare or just be an opportunity to lower your total health costs for a few years before your spouse retires.