Boomers look for cheap health insurance as concerns about health care costs grow
By Maryalene LaPonsie on June 22, 2011
The idea of retirement has been well romanticized in American culture. Many of us still working the 9 to 5 grind imagine retirement to be a carefree time when we can travel on a whim or perhaps spend time at our beach house. We'll be footloose and fancy-free…or so we think.
Baby Boomers who are staring retirement in the eye might tell us a different story. On the tail end of the worst recession since the Great Depression, older men and women are feeling anxiety regarding their prospects in retirement. That's the overwhelming response reported in a recent survey of middle-class Baby Boomers conducted by the Bankers Life and Casualty Company Center for a Secure Retirement (CSR).
Baby Boomers nervous about paying for health care in retirement
The CSR survey found that Baby Boomers are almost universally concerned with their financial security in retirement. An astounding 95 percent reported financial concerns with 80 percent worried about paying for health care. Many of those have already taken action to address the increasing cost of medical expenses:
- 64 percent have worked to cut their health care expenses
- 55 percent have delayed going to the doctor
- 26 percent have postponed an elective surgery
- 25 percent have switched to less expensive health insurance plans
Results from the CSR poll reinforce earlier findings from the AARP's 2010 "Insight on the Issues" survey. In that report, workers older than 55 years old stated they had delayed medical treatment or even dropped their health insurance coverage in order to make ends meet. Most disturbingly, AARP concluded that some older workers may never recover from the recent recession.
Health insurance for retirees and early retirees
Currently, members of the Baby Boom Generation range in age from 47 to 65. Those who have reached age 65 are generally entitled to receive Medicare health insurance. Original Medicare is provided by the government to pay for hospitalizations as well as ongoing medical care. In addition, upon enrolling in Medicare, seniors are entitled to purchase supplemental health insurance--called Medigap--to reduce their out-of-pocket costs.
Boomers who haven't hit age 65 and wish to retire early need to explore other health insurance options. For example, federal health reform provided subsidies to encourage businesses to maintain insurance coverage for their early retirees, and approximately 5,000 employers and health insurance providers are participating in the Early Retiree Reinsurance Program.
Other early retirees may be able to purchase COBRA health insurance if they had group insurance through their last employer. This insurance option allows workers to continue their group coverage although they must absorb the entire cost of the health insurance premiums. Employers are also allowed to tack on an administrative fee to the premium price. Although COBRA health insurance can be cost-prohibitive, for those with pre-existing conditions, it may be cheaper than an individual health insurance plan.
Finally, through an overlooked provision of the health reform law, some early retirees could get free health insurance through Medicaid in 2014. MSNBC is reporting that up to 3 million Baby Boomer couples earning up to $64,000 a year could be in line for Medicaid coverage. However, the eligibility was unintentional and with two years before the provision goes into effect, Boomers would be well advised not to count those chickens just yet.Tags : medicare, senior health insurance, early retirees