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Retirement and the Boomer Money Gap

The Health Insurance Conundrum for Boomers

MusingsThe Medicare "open enrollment" period started on October 15 and runs through December 7. This annual rite of passage for individuals turning 65 marks a time of health insurance transition for Boomers, so it seems like a good time to consider health insurance in general.

Boomers likely remember the time when employer health insurance plans were a right, not a privilege. In my full-time employment years (both as employee and employer), I took employer-paid health insurance for granted. Not only that -- the employer-paid plans were excellent: The majority of the monthly premium was paid by the company, deductibles were low, and the coverage was comprehensive.

Nowadays, full-time employment is not a guarantee of similar health insurance coverage. Employers have become far more stingy and workers are expected to shoulder more of the burden. If an employee leaves a full-time position, retaining health insurance coverage becomes a problem. For example, I left a company with a fine health insurance plan and started my own small business. I was able to stay on my previous employer's plan for a short period of time via COBRA, but when that ended, I had to purchase health insurance on my own, since I was not yet Medicare-eligible. This was prior to the Affordable Care Act. My private health insurance plan became my largest monthly expense.

When I reached the age of 65, I signed up for Medicare. While I was relieved of some of the health care insurance costs, I learned that Medicare is not a free program. Part A is provided without cost, but Part B requires a premium payment. You must also pay additional amounts for Medicare supplemental insurance and prescription drug coverage, which I chose to do. The fact is, if you are on Medicare and you want health insurance coverage that is anywhere close to the insurance you enjoyed as an employee, you will be paying for it -- and you may be doing so at a time when you can least afford it. Keep in mind that there is no "family plan" in Medicare, so if your spouse also wants to be covered by Medicare, he or she will have to sign up and pay as well.

I am happy Medicare exists. It does relieve Boomers of the uncertainty of covering catastrophic medical costs, and for those Boomers who are willing to pay for it, more comprehensive coverage is possible. With all of its flaws, government-supported Medicare is surely better than fully private insurance or no health insurance at all.

Still, for Boomers who leave full-time employment, patching together health insurance coverage prior to age 65, and being adequately covered even with Medicare, are challenges to anyone with a reduced income. Those of us who want suitable coverage will continue to have to pay for it. That's a budget line item that will be increasingly difficult to swallow.

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