Where to find temporary health insurance for early retirees

Dear Savvy Senior: I’m retiring in a few months and will need temporary health insurance until I can enroll in Medicare at age 65. What are my options? — Early Retiree

Dear Early Retiree: There are several places early retirees can find health insurance coverage before Medicare kicks in, but the best option for you will depend on your income level, your health care needs and how long you’ll need coverage. Here’s where to look.

Affordable Care Act: For most early retirees who aren’t yet eligible for Medicare, the Affordable Care Act health insurance marketplace is the best option for comprehensive health coverage. And you won’t be denied coverage or charged extra for pre-existing health conditions.

If your income falls below the 400 percent poverty level after you retire — anything less than $60,240 for an individual or $81,760 for a couple in 2024 — you’ll also be eligible for a subsidy that will reduce your monthly premiums. The ACA also ensures that at least through 2025, households with incomes above that 400 percent poverty level will not have to pay more than 8.5 percent of their income for a benchmark policy.

To shop for ACA plans in your state, visit HealthCare.gov or call 800-318-2596.

COBRA: This is another temporary health insurance option, if you are eligible. Under this federal law, if you work for a company that has 20 or more employees, you can remain on your employer’s group health plan for at least 18 months. But be aware that COBRA isn’t cheap. You’ll pay the full monthly premium yourself, plus a 2 percent administrative fee.

To learn more, talk to your employer benefits administrator or contact the Employee Benefits Security Administration at Askebsa.dol.gov or 866-444-3272.

Short-term health insurance: If you can’t find an affordable ACA plan and COBRA is too expensive, another possible option is short-term health insurance. These are cheaper, bare-bones health plans that provide coverage for up to three months with a one-month extension available. But be aware that short-term plans don’t comply with the ACA, so they can deny sick people coverage, don’t cover pre-existing conditions and can exclude coverage essentials such as prescription drugs.

To find and compare short-term health plans, try sites like eHealthInsurance.com or PivotHealth.com.

Health care sharing ministries: If the previously listed options don’t work for you, another temporary solution could be a health care sharing ministry. These are cost-sharing health plans in which members — who typically share a religious belief — make monthly payments to cover expenses of other members, including themselves.

HCSMs are cheaper than paying full out-of-pocket costs for traditional health insurance, but be aware that HCSMs are not health insurance. They don’t have to comply with the consumer protections of the ACA, and they can also reject or limit coverage for pre-existing health issues and limit how much you’ll be reimbursed for your medical costs. Preventive care typically isn’t covered either.

To look for these plans, comparison shop at the three largest providers: Samaritan Ministries (SamaritanMinistries.org), Medi-Share (MyChristianCare.org) and Christian Healthcare Ministries (Chministries.org).

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org.