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What will I do about health insurance?

As you look forward to retirement, one thing you should not overlook is how you are going to manage your medical costs. While there are several ways to tackle the issue, you will need to do some careful calculating and planning as you consider which one is best for you. In some cases, you may have the option of simply extending your current employer’s health plan. In others, you may be enrolling in an entirely new plan. In addition, there is Medicare. In any case, it is important to understand how each plan works in relation to your health care needs.

Getting started

While selecting retiree health coverage may seem like an overwhelming decision, it is an important one that should not be rushed. That’s why it is a good idea to start sooner rather than later. To help get you started, below are some things to think about before enrolling in a retiree health plan:

  • Your level of anticipated income during retirement;
  • How your medical needs may change in retirement;
  • The length of time any given health plan coverage will be available to you and what your options are if that coverage expires;
  • The retiree benefits available through your current employer or state plans (if any); and
  • Your age at retirement—if you retire before age 65, you will need to arrange for coverage between the time you retire and the time you are eligible for Medicare at age 65.

Retiree health plan options

Some of the more common types of retiree health plans are listed below. However, you should be sure to explore all of the resources that may be available to you as each person’s circumstances are different.

  • Employer- or union-sponsored plans. Both you and your spouse/partner should check with your local union representative, human resources department and/or benefits plan administrator to see what retiree health insurance options are available to you. As a union member, you are more likely to have retiree health benefits through one of these types of plans than most other groups in the country. However, it is a good idea to have an alternative plan just in case your plan is modified in the future.

In the event you lose access to your employer- or union-sponsored plan, you may be able to continue your coverage under the plan by electing COBRA continuation health coverage. However, this coverage usually is temporary (e.g., 18 months) and the person electing the coverage is required to pay the entire cost of coverage.

  • Medicare Parts A, B and D. These government-sponsored plans provide coverage for hospitalization, doctor visits and prescription drugs; however, there are specific regulations about enrollment and level of coverage for each of these plans.
  • Medicare Advantage. Also known as Medicare Part C, Medicare Advantage provides Medicare coverage through private managed-care organizations. These plans may offer you additional options in cost and provider choice.
  • Medigap. This private insurance can be purchased to help cover any "gap" in coverage left by Medicare.
  • Supplemental programs. Union membership offers two additional programs—Alliance for Retired Americans retiree health insurance and the Union Plus Health Savings Program. These programs may be able to help you better manage your medical costs in retirement.
  • Other coverage. If you retire before you are eligible for Medicare (generally age 65) and then lose access to your employer-sponsored health plan, coverage may be available in the individual insurance market in your state. If you qualify, you may be eligible for guaranteed access to an individual policy without any exclusions for pre-existing conditions. However, this coverage often is expensive. You should be sure to review all available health coverage options before you decide to retire.

For details about the options above, including more information on retiring before age 65, click here for more on managing your medical expenses.

What to do first?

If you are unsure where to start, the short "To Do" list can help get you started.

Get involved

The AFL-CIO is working to help Americans get the health care coverage they need. Learn more about how you can get involved here.

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