Associate yourself
Many professional and trade organizations offer group health rates. If you decide to become self employed in retirement, your local chamber of commerce may even offer a deal if you join up with that group. Association coverage is worth checking out through alumni and religious affiliations as well, but it may not be much cheaper than some individual policies if the group is too small. However, don't count out this route entirely.
Another plus of association coverage - if it counts as a group policy, you may be protected under HIPAA (the Health Insurance Portability and Accountability Act). This law keeps insurance companies from barring your from certain coverage due to preexisting conditions, so long as you have been covered almost continuously by a group plan or COBRA for at least 18 months. (For more, see "Retire Early With Affordable Health Insurance")
Become self employed
No, this isn't for everyone. But if you pictured doing any sort of work on your own in retirement, do it now instead of later - and cop some valuable health insurance benefits. These include the ability to tax-deduct a large portion of the cost of your own and your family's health insurance, including COBRA coverage. Right now, you can deduct about 40% of coverage, but this is slated to rise to 100% by 2003 - and even sooner if current legislation passes. You may also become eligible for a state "insurance pool" for small businesses (yes, even a one-person show may qualify). You can even establish a medical savings account, which allows you to build a tax-deferred account for potential health bills and to take any unused contributions back penalty-free at age 65.
If you go the self-employment route, look into the carriers that have been screened by the National Association for the Self-Employed. You can tap into quotes and information on these insurers right at the group's web site (http://www.nase.org), or call 800/232-6273.
Purchase a high-deductible policy
If you're healthy, this is do-able. One estimate reports you can insure a four-person family for under $100 per month, though the annual deductible could be about $10,000. But consider the gamble - you save hundreds of dollars per month and, at worst, you're out $10,000 tops if you are hit by an expensive condition.
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