FAIR Health Consumer Access

Health Insurance in Retirement

Navigating your health insurance options when you retire can seem like a lot to handle. If you’re 65 or older, you can sign up for Medicare. But you also may need to find a supplemental plan to cover your out-of-pocket costs. If you retire before you’re 65, you’ll need to find health insurance to cover you before you’re eligible for Medicare. Whatever age you are when you retire, you have health insurance options.

If You Retire before You’re 65
If you’re looking to get health insurance upon retiring before you’re 65, there are many places to look.

COBRA. The Consolidated Omnibus Budget Reconciliation Act, or COBRA, lets you stay on your prior employer’s health coverage for up to 18 months. But you’ll have to pay the whole cost of the plan. You can find out more about COBRA here.

Buy your own. You can buy coverage straight from an insurer. You also can buy it through a Health Insurance Marketplace or Exchange that the federal government and many states run. These are websites where you can buy health insurance. They offer one or more health plans from which you can choose.

Medicaid. If your income is under certain limits, you may be able to get free or low-cost health coverage through Medicaid. Medicaid is a state-based program funded jointly by the federal and state governments. All states, the District of Columbia and US territories offer Medicaid. Learn more about Medicaid here.

Other options. If your employer offers retiree health coverage, you may be able to sign up for that plan. If your spouse or domestic partner is working and has health coverage, you may be able to get covered on his or her employer’s plan.

If You Retire When You’re 65 or Older
If you retire when you’re 65 or older, you can sign up for Medicare. Here’s a look at how it works and other health insurance options.

What is Medicare? Medicare is the US health insurance program for people 65 and older (and for those with disabilities or certain illnesses). It has different parts that cover different things. You can choose the parts that best meet your healthcare needs. If you have health insurance through your (or your spouse’s) employer, you can probably wait and sign up for Medicare when you (or your spouse) retire. But in some cases, you may need to enroll in Medicare when you turn 65, to avoid gaps in coverage or late enrollment penalties.

How does Medicare work? Part A (hospital insurance) covers inpatient hospital stays, skilled nursing facility care, hospice care and some home health care. Part B (medical insurance) covers certain doctors’ services, outpatient care, medical supplies and preventive services. Parts A and B together are known as Original Medicare. Click here for more information on Original Medicare and how to sign up. Prescription drugs are not covered under Original Medicare. If you need prescription drug coverage, you’ll need to add a separate plan. This is known as a Medicare prescription drug plan (Part D).

Medicare Advantage (Part C). Part C can give you coverage for Parts A, B and often Part D in one bundle. Part C plans, known as Medicare Advantage plans, are offered by Medicare-approved private companies. Common types of Medicare Advantage plans include Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) options. You can learn more about these plans and how to join here.

Medigap. There’s another health insurance plan option, called a Medicare supplemental insurance policy (Medigap). You can add this to Original Medicare. A Medigap policy can help pay for certain healthcare costs, such as deductibles and copays. Keep in mind that you generally can’t have a Medicare Advantage plan and Medigap at the same time. You’ll need to choose one or the other.

Dual eligibility for Medicare and Medicaid. If you’re eligible for Medicare and Medicaid, you’re considered dual eligible. If you’re dual eligible and visit a doctor who accepts Medicare and Medicaid, Medicare will cover the services first and Medicaid will cover most costs that Medicare won’t pay, such as copays and any deductibles. To learn more about how Medicare and Medicaid work together, click here.

If You Retire from the Military
You may be able to sign up for health benefits if you retire from the military. The US Department of Veterans Affairs offers VA health benefits if you served in the active military, naval or air service and meet certain conditions. You’ll be covered for health exams with your doctor, specialist appointments, home healthcare and more. Find out if you’re eligible here. You also may be eligible for TRICARE health insurance if you’re a military retiree. This is a federal program managed by the US Department of Defense. There are different TRICARE plans, including a plan for retirees who have Medicare Parts A and B. Learn more about TRICARE and if you’re eligible here.