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Retirees and seniors thinking about retiring must plan for health-care costs, or they will likely find themselves facing financial problems. As one gets older health care becomes more expensive. A study by the Institute for the Future found that seven in ten Medicare beneficiaries have two or more chronic ailments and that roughly half of Americans now turning 65 will at some point spend time in a nursing home, with one in ten staying three years or longer.
The federal Centers for Medicare & Medicaid Services performed a 2004 study which found that health-care spending in the United States surged to $1.6 trillion in 2002. Prescription drug costs grew 15.3 percent for the year, far outstripping the growth of most pension checks and Social Security checks. According to the Kaiser Family Foundation and the Health Research & Educational Trust, family premiums in 2004 in employer sponsored health-care plans rose 11.2 percent over the previous year to $9,950. |
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How do you Pay for Health Insurance
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When you are no longer working and are not as yet 65?
If you have lost your job you may be entitled to keep your coverage for up to 18 months, depending on the size of your prior employer. This program is called COBRA.
The cost of an employer-provided health insurance plan is usually very expensive. The annual premium for an individual policy in 2008 was $4,704, according to the Kaiser/HRET survey. A family plan was $12,680.
In most employer plans the employer pays a portion of the annual premium. You probably do not even know how much your employer actually paid. Once you are no longer with the company and make the decision to use COBRA you will have to pay the entire premium. Although this is not cheap it is still a great deal less than purchasing insurance with similar coverage on your own.
If you COBRA you must sign up to extend your health care coverage within 60 days of becoming unemployed. |
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