A new
book from economist Paul Zane Pilzer on health insurance for private
individuals and small business owners who must purchase their own
insurance. Pilzer promises that health care can be comprehensive and
affordable for those who understand the system.
Excerpt
The following is an excerpt from the book The New Health Insurance Solution.
If you retire before age 65 when you become eligible for Medicare, you
may face the most challenging health insurance period of your life.
Why Employers Are Cutting or Canceling Their Retiree Health
Insurance Benefits
When employer-sponsored health insurance began, people often worked for the
same employer for most of their life-there was an unwritten contract between
a corporation and its workers to provide health benefits, retirement
benefits, and lifetime employment. This contract was shattered during the
past two decades as globalization forced employers to lower their labor
costs to remain in business.
If you currently work for one of the few companies that provide
retiree health benefits, don't expect your company to still be providing
them when you retire. If you are currently receiving retiree benefits, don't
count on these benefits continuing unless your former employer is bound by
an ironclad contract.
Even if your former employer is bound by a contract, unless the company is
exceptionally strong, your retiree health benefits may be terminated through
bankruptcy court. ERISA law protects pensions, but not retiree health
benefits, against corporate bankruptcy.
If you work for a state or local government entity that provides
free retiree health benefits, you might get to keep them. But I wouldn't
count on getting any more such benefits once the taxpayers learn how they
have been deceived into paying for something that they don't get themselves.
If you or a spouse work for a school district or are contemplating
taking a teaching or government job for a few years, you should look into
what type of retiree health benefits they offer, as this could be the health
insurance deal of the century...for as long as it lasts.
Health Insurance Solutions for Early Retirees-Ages 55 to 64
Getting health insurance coverage after retirement is the biggest issue
facing workers today who have saved enough money to retire early. If you are
very healthy, or if you already have an individual/family policy, you are in
luck. No matter how many medical issues you have had, if you were healthy
when you first applied, you are probably still paying the basic premium for
a healthy individual of your age. Basic premiums on HSA-qualified health
plans range from $158 to $252 a month from top name-brand carriers.
$$$ Tip: If you are over 50
and seeking individual/family health insurance, it might be better to
separate your family when you apply, especially if your spouse is younger.
Health insurance for couples and families is sometimes based on the age of
the oldest individual, and different carriers have different age-rating
bands-one might be 55 to 59 and another 56 to 60-so shop around and try
different combinations of family members to find the best deal. If you
choose a family policy, put the policy in the name of the younger spouse so
that person still has coverage when the older spouse switches to Medicare.
$$$ Tip: Premiums for
individuals age 55 to 64 are so high that in some cases it may actually be
cheaper to get state-guaranteed health insurance from a state risk pool as
if you were unhealthy-check out the rates in your state. As explained in
Chapter 7, to become eligible for a state risk pool you typically have to
first apply and get rejected or uprated by a private carrier, although many
state risk pools may accept you with just a letter from a licensed agent
stating you would have been uprated or rejected if you had applied.
Negotiating with
Your Employer for Early Retirement Health Insurance Expenses
You are probably not the only one age 55 to 64 who would like to retire
early and leave your employer-sponsored group health benefits plan-your
employer and your coworkers have a great financial incentive for you to do
this. Even if you are not consuming a single dollar in annual medical
expenses, based on your age alone, the premium for you is about three times
the price of the premium for younger workers.
The total premium for an employer-sponsored group health plan is
based on an annual census of the employees, with the premium for an older
worker typically three times the premium for a younger one-even if they are
both healthy.
Thus, you may have some bargaining power with your employer, who will save a
significant amount of money if you leave the company's group plan.
$$$ Tip: Never ask your
employer to do something for you alone related to its ERISA-governed
employee benefits plan-employers are not allowed to do anything for you
without offering the same benefit to everyone else. However, there are ways
to ask for what you want without violating ERISA. For example, suppose you
are 62, want to retire early, and want your employer to pay the $250 per
month premium on your individual policy until age 65. Go to your employer
and offer to quit in return for a $9,000 termination bonus. Don't mention
that you want the money to pay your healthcare premium or anything connected
with the fact that you getting a special deal for retirement.
$$$ Tip: Ask your benefits
administrator whether your company will soon be offering a retiree medical
Health Reimbursement Arrangement (HRA) and if not, ask for one.
Excerpted with permission of the publisher John Wiley &
Sons, Inc. from TITLE. Copyright (c) year by
COPYRIGHT HOLDER. This book is available at all bookstores, online
booksellers and from the Wiley web site at
www.wiley.com, or call 1-800-225-5945.
Paul Zane Pilzer is a world-renowned economist, and a
former advisor in two White House administrations, as well as an
entrepreneur, and a New York Times bestselling author. A former
commentator on NPR and CNN, he is also the cofounder of a company providing
individual health benefits to employees of Fortune 500 companies. His
previous books include the New York Times bestseller God Wants You
to Be Rich, The Wellness Revolution, Other People's Money , and
Unlimited Wealth . See
www.paulzanepilzer.com for more information. For more information on
this book, see
index.htm.
