Retire Early With Affordable Health Insurance - Is It Possible?
In short, you get a better deal if you live in a state with a "federal fallback" position, which allows that state's COBRA alumni to choose between their insurers' two most popular health policies. Therefore, once way to lower HIPAA coverage costs is to simply move to a state with federal fallback, if you planned to retire elsewhere anyway. (Hint: Arizona and Hawaii are federal fallback states.) To find out more about how this system works and the HIPAA positions for your states of interest, contact each state's insurance commissioner. You can look up these numbers easily on Insure.com at http://www.insure.com. This site's health insurance section also has some excellent details on HIPAA that I don't have room to cover here, so check it out as you research your insurance options.
What to Watch For
Both COBRA and HIPAA carry restrictions that you should plan for even before you leave the working world.
Get your spouse covered ASAP - If you plan on having your spouse covered under your company or COBRA plan in retirement, he or she may need to be in the plan for a number of months or even years, so get them covered as soon as possible.
Being "pushed out"? Then push for coverage - If your company is "encouraging" you to take early retirement, go right ahead and bargain for life-long health insurance. Age discrimination suits are serious business nowadays, so your request could well be taken seriously (just get it in writing).
Same thing if your spouse will be Medicare-eligible - If you plan to retire at the same time as your spouse who will be eligible for Medicare, move into his or her group plan now. That way, you may be eligible for up to 36 months of COBRA coverage.
Apply for COBRA as soon as you leave your job - Within 60 days of the day you leave your job, you must notify your plan administrator of your intent to use COBRA coverage, or lose out.
If you work for a small company, COBRA may not count - COBRA generally applies only to employees of firms that provide health coverage in the first place and employ more than 20 workers.
If you want "cheap COBRA," consider retiring before 2001 - By 2001, companies will no longer be required to offer retirees both a core (such as medical-only) and a packaged plan - one that may include extras such as dental coverage,
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