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Examining Early Retirees' Access To Health Insurance

Armen Hareyan's picture

USA Today on Tuesday examined access tohealth insurance in the second part of a five-part series about the personalimpact of baby boomers leaving the work force. Although U.S. residentsare working longer, most still retire before they are eligible for Medicare atage 65, USA Today reports. The median age for retirement in 2006was 64 for men and 61.9 for women, according to the American Academy of Actuaries. U.S. residents are eligible forSocial Security benefits at age 62. According to USA Today,"Finding a way to bridge that gap -- eligible for Social Security but notfor Medicare -- will be the hardest and costliest challenge for many of theboomers who want to retire early or are forced out of their jobs."

In the past, retirees often have relied on employer-sponsored health coverage, USAToday reports. In 2007 one-third of large employers provided retireehealth benefits down from 66% in 1988, according to a survey by the Kaiser Family Foundation and the Health Research & EducationTrust. The surveyalso indicated that 5% of employers with fewer than 200 employees offeredretiree health benefits in 2007.

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In addition, USA Today reports that many of the companies that continueto offer coverage to retirees are reducing benefits or requiring them to paymore out-of-pocket costs.

People who retire early and do not have employer-sponsored coverage might needto purchase coverage until they become eligible for Medicare, but"individual policies for people in their 60s can be hugely expensive, withpremiums topping $900 a month for family coverage," USA Todayreports. In addition, people with health conditions might not be able to findcoverage "at any price," according to USA Today. DavidCertner, director of federal affairs for AARP, said some early retirees who donot have employer-sponsored coverage are "just hanging on until they'reeligible for Medicare." He said, "Either they can't afford (healthinsurance), or they can't get it. They're hoping nothing happens before theyhit age 65." According to AARP, about 16% of individuals ages 50 to 64 areuninsured.

USA Today also highlights different options retirees have toobtain insurance, including joining a spouse or partner's employer plan,inquiring whether the retiree's employer allows retirees to purchase coveragethrough the company plan, obtaining coverage through COBRA, purchasing coveragethrough membership organizations or purchasing a private plan (Block, USAToday, 1/15).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.