I’m retiring. COBRA, GetCoveredNJ or other options?

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Q. I’m turning 65 in April and retiring with a 52-week retirement package but no healthcare coverage. It’s daunting to look at health coverage, which my wife and I will both need, and of course, COBRA is so expensive. When we go to GetCoveredNJ for my wife because I will have Medicare, it asks for family income. Coupled with my retirement package, we get no discounts and the cost for her is more than $800 a month. Any thoughts on where we can go for something more affordable?
— Planner

A. Congratulations on your upcoming retirement.

Healthcare is a huge issue to tackle in retirement.

From a cost perspective, for you, the best option is Medicare, said Matt Rembish, a certified financial planner with OneDigital in Boonton.

Your wife will have three options: COBRA, finding a policy on the open market, or employment at a company with group coverage, he said.

We get that looking for a new job with health insurance isn’t high on her to-do list, so let’s review the other options.
COBRA gives employees the option to continue coverage on their group’s health plan for a period after a “qualifying event,” Rembish said.

This “qualifying event” could be job loss, death, divorce, reduction in hours and other issues. As you noted, this tends to be rather expensive and may not be the best option depending on your circumstances, he said.

The open market — GetCoveredNJ — offers many options.

Rembish said available plans can be broken down into three categories:

Gold: Higher premiums and you pay less out-of-pocket for care.
Silver: The middle ground,
Bronze: Lower premiums, but you pay more out-of-pocket for care.

“If your wife is healthy, doesn’t need medical services often, and doesn’t take prescriptions regularly, at bronze-level plans would be best,” he said. “Generally, you must wait for the open enrollment period (Nov. 15 through Jan. 1) to join one of the plans, but you can qualify for the special enrollment period under certain situations.”

The last option would be to try to join a company with a group health plan, but there’s no guarantee of what kind of coverage it would be and at what cost.

You should keep shopping around, and go back to GetCoveredNJ to see if other plans, such as those with higher out-of-pocket costs, would bring down the premium to something that’s more reasonable for your budget.

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This story was originally published in February 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.