Six Steps to Getting Health Insurance When Retiring Early

If you want to retire early, CNN Money says you have to get your health insurance right and they list six steps to doing so:

• Do a reality check. Before you get too carried away with an early-retirement dream, you need a realistic idea of whether you can buy insurance on the open market and, if so, whether you can afford it.

• Get in better shape. The healthier you are, the easier your insurance search will be and the lower your premiums.

• Probe the paperwork. Even if you're in the best of health, your medical records may paint a less flattering portrait due to errors or omissions. So when you schedule your checkup, ask your doctor to set aside time to review your medical history with you for accuracy.

• Stay with the company. Firms with 20 or more employees must give you the option of staying on your insurance plan for up to 18 months.

• Start the search. Launch your hunt for an individual policy a few months before you leave your job or before COBRA expires (once offered a policy, you usually have to start it within a month).

• Look for a last resort. If you can't get individual coverage, you have options, though they're not ideal. By law, states must make last-resort insurance available if you're HIPAA-eligible. But these plans can be limited and costly.

Yes, getting decent coverage at an "ok" price is do-able, but it's getting harder and harder as time goes on. Just another data point that says healthcare will have a huge impact on when people retire, how they retire, and even if they retire.

Comments

[Matt]

Step number zero: Get individual health insurance while you're still employed, and forego your employer's plan. It's almost certainly cheaper, especially if you start while you're still young, and even pre-retirement it's an awful lot safer. An individual insurance plan can only drop you if you stop paying your premiums, but your work-tied insurance goes away whenever your boss, in a fit of pique, decides he doesn't like you anymore. And if a member of your family gets diagnosed with a disqualifying condition, you'll never be able to switch jobs again, unless you already have an individual policy beforehand.

Step number eight: Vote McCain! We need to reverse the WW2-era mistake of tying health care to particular relations between employer and employee. It makes health security very hard to come by, provides employers an intolerable whip-hand against workers with families ("you'd BETTER work 6 extra hours per day and come in weekends for no extra pay, or the next time your kid gets sick, your whole family will go bankrupt!"), and contributes to the nightmarish upward spiral of medical costs by completely seperating the decision-making from the payment in all but a very tiny minority of cases. That minority needs to become the majority.