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So, you want to retire but you’re not old enough for Medicare. Here’s what you can do.

Carol Harlow, here working at home alongside her cat Jumbles,  left her job where she had insurance to work as a financial consultant from home.
Carol Harlow, here working at home alongside her cat Jumbles, left her job where she had insurance to work as a financial consultant from home.

Are you hoping to retire early?

Finding health insurance to bridge the gap until Medicare kicks in at age 65 may be a hurdle. Twenty years ago, two-thirds of large companies offered health insurance for early retirees. Last year, the Kaiser Family Foundation reported, only one in four firms offered such coverage.

With an eye on retirement, Carol Harlow left her financial consulting firm a year ago to work from home. Just before she left, the company changed insurance plans.

“Lucky for me,” she said, the new plan wasn’t “age-weighted,’’ making her premium the same as that of younger employees. She pays $600 a month for COBRA, a federally mandated continuation of the company’s health plan for 18 months with the former employee paying the full cost of insurance.

“By the time COBRA ends, I’ll have 17 months of paying independently before I’m 65, if the premiums don’t kill me,” she added, half joking.

Ronald Pfeffer and his wife, Nancy, retired early to The Villages, a massive over-55 community in Central Florida. Nancy, a former nurse, has health insurance till she turns 65, but Ron “has to hang on almost another three years” before Medicare kicks in.

Ronald Pfeffer and his wife, Nancy, retired early to The Villages, an over-55 community in Central Florida. Nancy, a former nurse, has health insurance till she turns 65, but Ron has three years to go before he turns 65 and can collect Medicare. He bought a short-term health insurance plan with a high deductible to bridge the gap.

He pays $209 a month for an inexpensive, short-term plan with a $5,000 deductible and has to renew it every three months, with a maximum length of three years.

“But to get this one,” he said, “you got to be healthy. You can’t have any pre-existing conditions.”

Pfeffer, who works out, kayaks, bikes and does yoga, says the lack of complete health coverage is “the reason we went on a whole food, plant-based diet.”

Mary Anne Williams of Miami Beach said she had fabulous health insurance for her family until “my company decided to drop my healthcare” coverage. She recently resigned as her husband is nearing retirement. She will be eligible for COBRA under his plan for 18 months.

“While I’m on COBRA, I plan to research” insurance options, she said. Her husband, meanwhile, can get Medicare.

Tammi Birkhimer, 59, a contract health information systems manager, uses her husband’s health insurance. She’ll qualify for her own when she completes two months at her current assignment. Depending on when her husband retires, she’ll use either his COBRA or her insurance.

After that, she figures she’ll need to buy health insurance for two or three years before turning 65. She has been putting money aside to help pay those future premiums.

Williams, Birkhimer and others hoping to retire early may be candidates for one of the Affordable Care Act plans, which must cover prescription drugs, pre-existing conditions and a wide range of health issues. They also are prohibited from charging those age 50 or older more than three times the rate for younger people, instead of five times the rate, which was common before the ACA became law.

In Florida, which did not set up a state exchange, residents enroll for ACA plans through Open enrollment for 2019 will run Nov. 1-Dec. 15, 2018.

Florida has the highest ACA exchange enrollment of any state in the country, with 1.7 million people enrolling for 2018. Insurance expert Louise Norris writes that 91 percent of Floridians who enrolled during open enrollment in 2018 received premium subsidies, compared with 83 percent nationwide.

The subsidies are a key factor in deciding whether to purchase an ACA plan through

“It’s two different groups,” explained Cynthia Cox of the Kaiser Family Foundation, a non-partisan research organization. “The people who would qualify for a subsidy . . . would be able to buy lower-cost coverage on the exchange market, which is,” said Cox, who is Kaiser’s director of Health Reform and Private Insurance.

Those “making more than 400 percent of the poverty level could still buy on the exchange but would not receive a subsidy and so many of them might choose to buy directly from an insurance company,” she added.

For 2019, a couple younger than 65 will qualify for subsidies if they make anywhere from “$16,460 to $65,840,” which is 400 percent of the poverty level, explained Cox.

“If I made just a little bit over $68,000 or $70,000 and had any control over my income, for some people it might make sense to make a little less” so that you can qualify for a subsidy,” Cox suggested.

Without subsidies, the ACA-compliant insurance could cost them from $22,000 to $23,000 a year. ACA policies are offered in bronze, silver and gold plans, with the gold having the lowest deductibles. Bronze plans have to cover 60 percent of a policy holder’s health costs. Silver plans cover 70 percent.

Generally, the less expensive a plan, the higher the deductible is. However, Cox said, “Some bronze plans cover a few doctors’ visits before the deductible kicks in.”

A couple in their early 60s making “about $65,000 very likely would get a free bronze plan. They would still have a significant deductible, but if they’re relatively healthy, that might be a pretty good deal for them,” Cox said.

In 2019, seven companies will offer ACA plans in Florida through People not qualifying for a subsidy may want to go through a broker or agent, who can sell plans on the exchange and those on the open market.

As Audrey Brown, head of the Florida Association of Health Plans, noted, “It’s important for consumers to have as much information as possible and find a solution that takes into account their individual financial situation and health status.”

Currently, ACA-compliant plans must insure people with pre-existing conditions but a case now making its way through the courts might jeopardize this coverage.

Most of the time, older people will be better off buying ACA-compliant coverage, Cox said. For example, non-compliant plans might not pay for prescription drugs. Short-term policies, such as the one Pfeffer bought, don’t cover pre-existing conditions.

As Harlow, the financial consultant, noted, “anybody our age certainly has something going on.”

To help pay for coverage gaps, Pfeffer set up a Health Savings Account, which works something like an IRA and reduces one’s taxable income.

“I can put up to $4,500 in a year and it’s deductible,” Pfeffer said. “I use the health savings account to pay for doctor and dentist visits . . . It depends on your tax situation. If you don’t use it by the time you’re 65, you pay taxes on it,’ said Pfeffer, who turned 62 in June.


Open enrollment for Affordable Care Act insurance will run Nov. 1-Dec. 15, 2018. Go to to enroll.