COBRA Coverage Expires
COBRA coverage can be an easy option for early retirees. By law, retirees are entitled to COBRA or continuing coverage through their employer when they retire. The problem is it expires, often within 18 months of early retirement. "That means if a client retires at age 58, his health insurance runs out before he hits age 60," says Harlow. "And you don't want that to happen when a client's health has taken a turn for the worse. I often advise clients, if they'll have long lapses in coverage before Medicare kicks in, to shop as early as possible for a policy to replace their COBRA coverage." Another incentive: COBRA insurance can often be more expensive than individual policies, Harlow adds.
Build A Trusted Network Of Health Insurance Advisors
If you have any doubts that health insurance is a complex subject, take a quick glance at issues covered on the National Association of Health Underwriter's home page (www.nahu.org). An expert who specializes in health care will know which carriers will be more open to a client with special underwriting needs. He or she will also be able to provide and price alternatives.
Health insurance experts should have a Registered Health Underwriter designation and maybe even a Registered Employee Benefits Consultant designation and should be members in good standing with either the National Association of Health Underwriters (www.nahu.org) or the Association of Health Insurance Advisors (www.ahia.net). The groups' Web sites offer search engines to make shopping for expert agents and advisors easier.
Sign Up For Medigap During The Six-Month Guaranteed Period
This is our last bit of advice. Vern C. Hayden, principal of Hayden Financial Group in Westport, Conn., learned this the hard way when he turned 65, blew past the six-month guaranteed Medigap enrollment period and then needed hip replacement surgery. He was busy writing his new book (Getting an Investment Game Plan, John Wiley) and was startled when he got his group policy premium increase-from $300 to $700. "They really want to get rid of you when you turn 65. Don't wait to buy a Medigap policy," says the veteran planner.