Health Coverage Options When Your Spouse is Too Young for Medicare
When you retire at age 65 and qualify for Medicare, what are the options for your younger spouse? In this situation, your spouse may be able to obtain health insurance provided by their own employer or continue coverage under the retiree benefits provided by your former employer. However, even if your spouse is eligible for an employer-sponsored plan, you may have access to quality health insurance at a lower premium by purchasing coverage through a federal or state health insurance exchange.
According to the AARP, many retirees who qualify for Medicare hold the false impression that a younger spouse will also automatically qualify. However, there is no family coverage under Medicare and only those with certain disabilities can obtain benefits before age 65.
As a temporary option, the COBRA law allows people who have left or lost a job to continue coverage through their former employer for up to 18 months by paying the full premiums. If eligible, spouses and dependent children can apply for and receive this coverage within a designated timeframe, even if departing employees do not apply for it themselves.
However, younger spouses facing loss of coverage have more and better options under the provisions of the Affordable Care Act (ACA). This enables you to find private coverage that comes with national protections through a federal or state insurance exchange. These protections include being able to buy individual insurance regardless of health or pre-existing conditions, annual caps on out-of-pocket expenses and subsidies on premiums for people with low or middle incomes. A retiree may purchase coverage via an exchange any time from 60 days before and 60 days after their effective date of retirement.
Even in light of recent premium increases, exchange options are a generally more affordable means of coverage than purchasing an individual policy that was previously subject to pre-existing conditions and limited lifetime maximums. For example, a person may purchase a major insurance carrier’s lowest-cost “Bronze” policy via a health exchange for hundreds of dollars less than the contribution level required by an employer-sponsored health plan.
The federal and state insurance exchanges also offer tax credits to help pay for a plan. For example, those with incomes less than $27,000 qualify for premium assistance under the ACA, with co-pays and deductibles that are close to zero. Those with an income under $47,000 also qualify for some tax credits to help pay for premiums. Overall, until a retiree’s younger spouse turns 65 and qualifies for Medicare, signing up for insurance through the ACA is probably the lowest-cost option.
Finally, finding an insurance plan that fits your budget and needs doesn’t require you to contact a major carrier, employee benefits advisor or insurance broker directly! Many websites – such as healthcare.gov and coveredca.com – offer online tools for finding health plans provided by almost all major carriers.
Pacific Federal is a subsidiary of Zenith American Solutions.
