It’s never too early to find out exactly what kind of health insurance coverage you have and how it can be affected through a job change or retirement. Unfortunately, most people don’t take precautions until they are forced to do so.
In 1988, Arnold Jackson,[*] a 60-year-old resident of Washington State, saw his health benefits disappear when his employer, an insurance firm, was phased out. When his wife’s insurance company took away the spouse option on her plan, he bought an individual plan for himself from BlueCross/BlueShield. In 1993, at age 65, he qualified for Medicare and bought a Medigap policy, which was cost effective but did not cover his prescriptions. Jackson has since switched from the Medigap policy to an HMO at a cost of $39 per month, has retained his Medicare coverage and pays $150 per month separately for prescriptions, since his HMO does not provide prescription drug coverage.
“Get all the information about your health coverage before you need it,” warns Richard Coorsh, spokesperson for the Health Insurance Association of America in Washington, D.C. Today, many Americans are opting for early retirement and need to make timely plans for continuous post-retirement coverage. Coorsh urges employees to contact their benefits manager to clarify the details as soon as possible. Since you probably wouldn’t become eligible for Medicare coverage before age 65, look into continuing on your employer’s plan, extending your coverage under COBRA, getting coverage under your spouse’s plan or taking advantage of the alternatives in individual or other group plans.
Although Jackson had the rug pulled from under him, he was able to regroup because he knew his alternatives. Most people, however, don’t. “Consumers are lulled into the subculture of ‘My company will pay,'” says Joan Lewis, assistant deputy insurance commissioner and the director of Statewide Health Insurance Benefits Advisors in Olympia, Washington. “If the company has been covering them for years, they’re not aware of the cost of health insurance when they’re on their own.”
In the face of escalating medical costs, health benefits are no longer a privilege, but a basic necessity. According to the Kaiser/Commonwealth 1997 National Survey of Health Insurance, 52 million adults ages 18-64 are currently uninsured or have a recent gap in health coverage. The majority are part of working families, yet most simply cannot afford to pay. Recent research sponsored by the Commonwealth Fund indicates that in 1996, annual premiums for single-person coverage averaged $2,099 nationally, while premiums for family coverage averaged $5,188. The key is to lock into continuous, affordable health coverage.
For the recently uninsured, there are, however, several cushions in place. Since 1986, COBRA benefits have come to the aid of individuals who have lost or changed their jobs. Through COBRA, you can continue to receive benefits from your former employer’s plan by buying group coverage for yourself for a limited period, usually 18 months.
You may also look into coverage under a new health plan. In the past, individuals applying for coverage under a new plan have met restrictions based on