Health care costs are one of the largest expenses you can face in retirement. You’ll want to plan ahead and set aside money in the form of savings, an IRA or rollover from your former employer, a long-term care policy, and/or health savings account (HSA) contributions to cover these costs.

Senior Health Coverage for Those 65+ and Retired: Exploring Your Options

If you are retiring or transitioning to retirement prior to age 65, or you’ve already retired, your financial challenge is the same: How will you pay for health insurance until Medicare kicks in?

While many employers offer pre-65 retiree coverage through COBRA, few employers subsidize this option; you must pay the full cost. However, some retirees are able to qualify for federal assistance through the Marketplace. The type of help available depends on your income level, and is based on a special calculation of modified adjusted gross income that’s specific to the ACA.

The good news is that, while most seniors and retirees must rely on Go to the blog Medicare for health coverage, there are a wide variety of private plans to choose from as well. These include Medicare Advantage Plans that provide hospital and health coverage along with out-of-pocket expenses such as deductibles and co-pays, and Medicare Supplement plans that reduce the cost of Medicare Part A and B premiums and/or deductibles, as well as Medicare prescription drug coverage.

Some seniors and retirees may also choose to enroll in Medicaid, a public health insurance program that provides free or low-cost health coverage for those with the lowest incomes. Depending on the state you live in, and your current income, it may be possible to combine both Medicare and Medicaid coverage to maximize your health care benefits at the lowest cost.

One thing to keep in mind: Generally speaking, postponing retirement until you’re at least age 65 will give you the best chance of being able to collect maximum Social Security benefits. This is because on average, you’ll be able to collect more per month than if you start collecting early.

In the meantime, if you’re a retiree or pre-retiree who has a stable and predictable source of income, you might be better off financially if you stay on your current employer’s health care plan until your Medicare eligibility date. In addition, you may be able to buy short-term health coverage in the Marketplace that will bridge the gap between your employer’s retiree coverage and when you can get Medicare. You can explore your options by using the NY State of Health Marketplace or getting help from a local resource. Ultimately, the most important step is to plan ahead and make smart decisions about how you’ll pay for your health care in retirement. This will require a combination of careful planning and discipline. The right strategy can help you stay healthy and on track for a happy and secure future.