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On My Own—But Not

Kristine Hayes

WHEN I ANNOUNCED I’d be retiring at age 55, the most frequent question I received from friends was about how I’d pay for health insurance. They knew I wouldn’t be eligible to receive Medicare for a decade. They also knew paying for 10 years of premiums would likely leave a large crack in my nest egg.

Fortunately, I was able to take advantage of a health insurance benefit provided by my former employer. As an early retiree, I’m eligible to receive health care coverage for the rest of my life. It’s a benefit no longer offered to new employees.

I maximized the benefit by retiring on my 55th birthday—the first day I was eligible to receive it. For the next 10 years, my former employer will pay a sizable portion of my health insurance premiums. Once I become eligible to receive Medicare, my old employer will provide me with a monthly stipend to purchase whatever supplemental coverage I want.

In 2023, my former employer will pay a total of $8,790 toward the cost of my health care coverage. That’s equivalent to two months of my take-home pay at the time I retired. I have to pick up a portion of the premium cost. Starting in January, my share will be $173 a month.

In October, I received my open enrollment information. Since my husband and I relocated to  Arizona after I retired, I’m limited to one option for insurance coverage. But that option allows me to receive care from any provider within the U.S.

Out of curiosity, I wanted to see how the plan I have compares to those available through the health care exchange set up under the Affordable Care Act (ACA). I discovered there were no ACA plans with a $1,000 deductible, which is what my current plan has. Looking at plans with a $2,000 deductible, there were three options. The least expensive of those would cost me $1,354 a month. That plan came with an annual out-of-pocket maximum of $8,700. My current plan has a $3,000 maximum.

It wasn’t clear to me if the ACA plan would allow visits to the hospital and clinics located in the retirement community where I live. Having the ability to see providers—whose offices are less than two miles from my home—is a convenience I can’t put a price on.

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