Don’t get caught uninsured if you decide to retire before age 65.

According to a 2007 study by AARP Public Policy Institute, between 2000 and 2005 the number of retirees age 50-64 without health insurance increased more than 25 percent, to more than 1.1 million people.

Spurred on by the fact that Social Security allows reduced benefits starting at age 62, many people retire before they reach 65, the age at which Medicare benefits kick in.  Millions more retire even before they reach 62, many of them without health insurance.

Living without health insurance can have disastrous effects.  Even if you are in the best of health, an unexpected illness or accident can at the very least compromise your retirement plans, and at worst put you in financial ruin.  While there are many reasons people find themselves without it, if you are considering early retirement, health insurance should be a top priority.

Planning Before Retirement

It’s important to know your health insurance options well in advance of retiring. 
Possibilities include employer coverage, coverage through a spouse’s employer, or purchasing individual private insurance. 

Ask yourself the following questions: Can you receive retirement health insurance through your current employer?  Through your spouse’s employer?  What affords you the best coverage for your money?

Usually, employer-sponsored coverage is your most affordable option.  However, if that’s not available, or if the coverage is expensive, try shopping around for individual insurance coverage.

Individual Insurance Coverage

Before looking for individual insurance coverage, consider your needs:

• What do expect our of your health insurance plan?  Is the plan just for you, or for your entire family?
• Is cost or flexibility more important to you?  How important is it to you to choose your own doctors?
• How much can you afford to spend on health insurance?  Starting with a realistic budget might narrow your options.

Once you have your basic insurance needs in mind, a professional health insurance agent can help you focus in on potential plans.  Try getting referrals for agents from family or friends, or visit the Association of Online Insurance Agents for a list of agents in your area. 

Before choosing an agent, check out his or her background through the Office of the Commissioner of Insurance in your state (in Michigan, the Office of Financial & Insurance Services. Make sure your agent is licensed and specializes in health benefits.  This takes only a few minutes and can save you from future headaches.

Comparison shop before signing on to any policy.  Web sites such as thehealthinsurancecenter.com, ehealthinsurance.com, healthinsurance.com and Affordable-Health-Insurance.org allow you to compare plans and get contact information.  America’s Health Insurance Plans, the health insurance trade organization, also has information on available plans.

When you do find a plan you like, make sure you completely understand all aspects of the plan and read the fine print.  The policy should cover major medical expenses such as hospitalization, and should clearly indicate the start date of benefits.  Many policies do not take effect immediately. Be sure to consider your new policy’s start date when ending any employment that affects your current health insurance benefits.