Health Insurance Options for Baby Boomers
If you were born within the years of 1946 to 1964, you are certifiably a baby boomer. Congratulations! Baby boomers have made many significant cultural contributions and societal advancements to be proud of. The music alone makes boomers arguably the greatest generation of all time. After all, boomers are responsible for the experimental explosion of the 60s that has left a permanent mark on society and continues to influence us to this day.
In 2019 the oldest boomers are around 73 years old and the youngest is 55. As a group they currently comprise 20% of the total United States population: the biggest adult population in recorded history. But just as a flower has its time in the sun, it will not last forever.
It is a part of all living things to age, but unlike flowers we as humans have the opportunity to take control of our health through our actions. There are many ways to stay healthy as we grow older, including balanced eating and regular exercise.
Regardless of your current health situation, you must be prepared financially when it comes to medical expenses (which are not cheap). In order to get the most out of your money, it’s very important to know your options when it comes to having health insurance.
How Did We Get Here?
After the end of World War II, there was a great “boom” of babies being born, as many of you already know. As the story goes, the soldiers coming home from overseas were eager to settle down and raise their families. There may have been other contributing factors as well, but the fact is that over the two decade period that followed WWII there was a massive increase in babies being born: more than 76 million in the US alone.
This new influx of young Americans soon led to a great time for our country economically. The country had never before experienced such consumer demand, which then led to more jobs and new opportunities. Business, as they say, was a booming!
Baby boomers were fortunate to grow up during this great time of American prosperity. Contributing to this in no small part was the G.I. Bill, which was established in 1944 to help veterans who were returning from war to attend college. After obtaining degrees, the parents of baby boomers were then able to pursue stable careers, which led in turn to unprecedented financially stability for many Americans. It was common back then to find a job that suited you and stick with it for decades, which would typically include healthy retirement plans.
Generally speaking, the parents of baby boomers were in a much better economic situation than the generation before them. As their own children became of age, many were able to afford to send these young baby boomers to college to then pursue higher career opportunities as well. Fast forward 50 years, and the data shows that boomers have done very well for themselves financially, accounting for 70% of our nation’s disposable income.
Baby Boomers All Grown Up
Here’s something to think about: every day there’s around 10,000 baby boomers turning 65. Many have retired from their jobs, much like their parents before them. Not everyone though - many continue working into their 70s and beyond.
There are some who continue to work because they’re passionate about where they work, and it gives them a sense of belonging or purpose to maintain a certain position. Or it could be the comfort of the routine after having done a job for so long, combined with the familiarity of being around coworkers that keep people working past 65.
Unfortunately though, there are many baby boomers who continue working past the age of 65 solely because they need the money. According to recent data from the Insured Retirement Institute (IRI) only 54% of boomers have set aside any money as a sort of future savings. This could be for an infinite number of reasons, but the reality is that many baby boomers are not prepared when it comes to their financial future. This is especially troubling when you consider that everyone will eventually require serious medical attention. Aside from cancer and heart diseases, which are the leading causes of death, there’s a never ending assortment of ailments that all of us will need to deal with as we get older.
We need to be prepared for the worst, and as responsible citizens, we need to be able to pay for it. Thankfully, this is where health insurance comes in.
The Basics of Health Insurance
Before we go any further, let’s address some basic principles of health insurance.
To stay healthy we need medicine, and we need doctors when we’re sick. Everything costs money, and sadly most medical services are extremely expensive and unaffordable to most Americans. Health Insurance exists to help offset these expensive expenses.
By signing up for health insurance you enter a large pool of people paying relatively small amounts monthly, even when you don’t need any medical treatment. The money paid in is for the assurance that when you do need it, your medical expenses will either be covered or offset by the insurance policy.
How much you end up paying for health insurance can vary a great deal. It really depends on what kind of insurance plan it is, and what kind of benefits it includes. You can also increase or decrease things like the deductible and coinsurance to affect the monthly premium.
What About Medicare?
There’s been a lot of misunderstanding about having health insurance through Medicare, so let’s be clear on what exactly it is and what it covers. Thankfully the government has provided a fairly easy to use website with a lot of great information.
Medicare: How It Works
Generally, you first become eligible to enroll for Medicare in the three months prior to turning 65 (permanently disabled adults are eligible for Medicare no matter their age), which is when the “Initial Enrollment Period” (IEP) begins. There is a limited time to sign up in the IEP, however, it ends 3 months after your 65th birthday.
If you do miss the IEP window, you can still apply for Medicare during the “General Enrollment Period” (GEP), which is January 1 - March 31 each year. You may have to pay a penalty for late enrollment though - and the coverage would not take effect until July 1.
Medicare: What it Costs and Covers
Medicare can be broken down into different parts which you have to sign up for separately. The two main components of Medicare are known as Part A and Part B.
Part A generally covers:
- Hospital care as an inpatient
- Nursing care in a facility
- Hospice care
- Home health care
What it costs depends on several factors, and ranges from zero (aka “premium-free Part A), to costing over $400 a month depending on the number of quarters during which the beneficiary paid Medicare taxes ($0 monthly premium if the beneficiary paid 40 quarters or more).
Part B relates to medical services or supplies that are needed for medical diagnosis, and preventative services for illnesses. It works similar to other health insurance policies, where you pay monthly for the coverage and also are responsible for paying the deductible and coinsurance amounts before any of the actual benefits kick in.
Some of the medical services covered in Medicare Part B include:
- Ambulance costs
- Clinical research
- Durable medical equipment (DME)
- Mental health
- Getting a second opinion before surgery
- Outpatient prescription drugs (limited)
Generally, the monthly premium for Part B is $134 per month (it can be higher for people with higher incomes).
Just like other types of health insurance, Medicare does not cover the total cost of the bill - it’s a shared expense. It is still worth it though, because without the insurance the services would cost exponentially more.
Part C refers to “Medicare Advantage” plans that private insurance companies sponsor. It combines Parts A, B, and D into a single private insurance plan (there are some Part C plans that do not include Part D so the beneficiary can obtain a stand alone Part D plan in that case). These insurance plans charge a premium but there are many that will cost the beneficiary $0. Many of these plans offer additional benefits such as dental, vision, or gym memberships that are not included in standard Medicare benefits. Medicare Advantage plans operate similarly to commercial major medical insurance plans with deductibles and coinsurance.
Part D is all about prescription drugs. If you require regular medication, it will not be covered under Part B that covers drugs administered in a clinical environment. You will need to sign up separately for a Part D policy.
What About Medicaid?
Medicaid exists to help those with limited income and resources, and offers benefits not normally covered by Medicare such as a nursing home care and personal care services. Click here for more information about qualifying for Medicaid. Beneficiaries eligible for both Medicare and Medicaid are referred to as dual eligibles.
The Bridge to Medicare
Since retirement and Medicare benefits generally take effect for those 65 and up, it’s important to know what the best options are for health insurance in the meantime. If you retire before the age of 65, unfortunately you’ll lose your health insurance coverage you had while working. Or there’s the people who never had health insurance through their employer.
For those not yet eligible for Medicare there’s a wide variety of individual and family health plans to consider. One option is Short Term Medical Insurance plans which can last up to 36 months. While the coverage may not be as inclusive as other health insurance plans, they’re great for people who don’t typically need a lot of medical attention. You end up paying less monthly, and it’s a way to cut the costs of medical bills when you do need it.
Short Term Plans are individually underwritten based on a number of factors, so how much they cost you depends on your current medical condition. Preexisting conditions are not covered under many short term plans, so there’s not always the best option if you anticipate having a lot of medical bills.
Another option is getting health insurance through the government website. The plans under the Affordable Care Act do not charge based on your current medical condition, but you can only sign up during the Open Enrollment period which is limited and comes once a year. If you miss the window and don’t qualify for an enrollment exception, you can still get a Short Term plan to carry you through until you can sign up again - or become eligible for Medicare. ACA plans, especially for someone in their 60s, can be pricey but the coverage is very comprehensive.
Have a Plan
When it comes to your health, you need a plan - both figurative and literally. You need to take responsibility for your own health, which means staying on top of any physical ailments and conditions. Regular exercise and healthy eating will help, but it can only do so much. In order to assist with the inevitable expenses, you’re going to need health insurance. But not just any plan, something that actually works for your specific needs and helps maximize your savings.
Looking at endless brochures and websites can be confusing. Everyone is different, which is why there are so many options when it comes to buying insurance. It’s not always clear what you’re getting into before your sign your hard earned money away.
This is no excuse for not having health insurance though, nor is the fact that you’re currently feeling healthy and don’t have a lengthy medical history. Whether or not you’re prepared for it, your health will eventually deteriorate - and it’s going to cost you. Without health insurance, it’s just going to cost a lot more.
There are always ways to save money. It can be confusing yes, but there are plenty of free resources available online to help find the best plan for your budget--both online health insurance agencies and information sites like HealthPocket. As with anything you pay for, it’s a good idea to read the fine print of any health plan you’re considering. Your specific condition may or may not be covered, so it’s important to find a plan that will actually benefit you.
A World of Convenience Awaits Online
Let’s face it, we’re living in very convenient times. In these modern times everything you need to buy is easy to find on the internet.
The great thing about online shopping is that you don’t have to go anywhere. The same is true with buying health insurance, it’s never been easier to do it all online from home.
You don’t even talk to anyone on the phone to complete the purchase - unless you want to.
If you have any questions about health insurance, or want to clarify something with an actual human being - there are ways to do this online too. Many websites include chat features where you can type your question to someone who will respond in real time, or phone assistance for those who prefer to speak with an expert over the phone. Generally, make sure you are working with a trusted site, one that displays its licensing information and has at least an A rating from the Better Business Bureau. The Advice from a licensed agent can help you find the right health insurance plan.
Buying insurance online is easy, and because you can compare competitor plans, you can save money by shopping around. It saves you time by not having to go anywhere, and you can go through the application process at your own pace from the comfort of your own home.
It all starts with getting a free quote. There’s no commitment at this point in the process, and you can set the parameters to whatever you want. You can take all the time you need to read all the details about the plan, including what it does and does not cover.
Go With What You Can Afford
There’s so many different options when it comes to choosing health insurance, and different levels of pricing depending on your income and how much money you can afford each month. The trick is to find a plan which will benefit you when you need it, but also not eat away all your savings. Consider your lifestyle. Are you an avid biker? Make sure your plan covers injuries caused by cycling, not just crashes, but lower back pain and repetitive muscle injuries. Are you more of a couch surfer? Then you may be more interested in a plan that offers wellness features, community memberships or a health coach.
Choosing a health insurance plan is a decision only you can make, so choose wisely. Even if you don’t need it now, you don’t want to get caught unprepared. You want you to live out your golden years with the peace of mind knowing that you’re covered when it comes to your health expenses. That’s the last thing you should have to be worrying about in your retirement.
Agile offers many different short term medical insurance options, depending on your state.