What to do if you don’t qualify for Medicare, but your spouse does

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In my 12 years of experience as a broker (licensed in Missouri, Florida, Michigan, and Illinois), this is a problem that 90% of my new registrants encounter. They talk to an agent or broker and are ready to start enrolling in Medicare and… “Wait. And my spouse?

Most of the time people are retiring from a group health insurance policy and they may have a younger spouse who will not be eligible for Medicare for a few years. In this situation, your spouse has a few options, although many agents do not deal with individual or private health insurance. That’s why it’s important to ask your agent or broker directly if they can help you.

What should I do if my spouse is eligible for Medicare but I am not?

First, ask your broker if they can help your spouse get coverage. Unfortunately, many brokers only handle Medicare, in which case your spouse may be left dry. People start looking for help online and are inundated with calls from 100 brokers across the country. If your broker handles private health insurance options, that’s a good thing. You have a one-stop shop.

Pro tip: If your broker does not offer private healthcare assistance, you have the option of finding a local licensed agent to help you https://localhelp.healthcare.gov/.

What are your options?

COBRA

The good news is that there are many great options in this situation. The most common is COBRA, the acronym for Consolidated Omnibus Budget Reconciliation Act. COBRA is available to spouses of retiring individuals who leave group health coverage and are not yet eligible for Medicare. You can continue your group coverage, but the employer no longer has to cover the premium at 50%, which means you are responsible for the entire premium, which generally makes it the more expensive option.

ACA or Marketplace coverage

The market is another option that can potentially offer a grant to your spouse to reduce costs. The subsidy is based on income and age, and when you retire you will usually have a little less income, which can be an advantage. However, if you are unable to obtain a subsidy for these plans, they can be almost as expensive as a COBRA policy.

That said, the other major advantage of ACA policies is that they pay 100% for preventative care and accept all pre-existing conditions. People with chronic conditions should keep their COBRA coverage or get an ACA policy to fill the gap until they qualify for Medicare. If you are unable to obtain a grant and do not have pre-existing conditions, then the following option may be for you.

Over-the-counter or private health insurance

These are much like the health insurance plans of the past. Policies are underwritten, which means applicants may be declined for pre-existing conditions. They also generally do not cover preventive care. However, if you are healthy, here is your reward for those long walks on the beach. You’ll get inexpensive coverage with low deductibles and perhaps additional benefits like discounts on dental and vision care and even free telemedicine. The cost can also be a quarter of the cost of COBRA or less, so eat your vegetables!

There are other options such as hospital indemnity plans and offerings from religious groups, but these are not considered health insurance. Contact your agent to see what is best for you.

The important thing to know is that there are many options for you or your spouse when transitioning to Medicare. Neither you nor your spouse will be left behind when you move. I suggest finding a good broker that offers plenty of options to see what works best for you. The good news is that you can usually find a cheaper option than expected, allowing you to stretch those retirement dollars as much as possible.

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