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The health insurance blues
Medicare doesn't cover spouses, or costly drugs, so some put off retiring
By Susan Brink
David and Sara Evans realized only recently that their six-year age gap
threatened to leave her, the couple's younger member, medically on her own.
Never mind that they have been through thick and thin together during 34
years of marriage. If David, 66, retires and accepts Medicare coverage,
he does it alone as Sara, 60, is five years shy of qualifying for the federal
insurance program for seniors. So David, who has health insurance through
his job as a history teacher at a private New York City high school, isn't
retiring anytime soon.
Sara Evans, and others like her, has few options for health coverage when
a spouse retires. Chronic problems, like heart disease and arthritis, hit
the elderly especially hard. The cost of controlling ongoing disease with
prescription drugs must be factored into any retirement plan: While Medicare
is the retiree's safety net, it doesn't cover prescription drugs. And less
well appreciated is that Medicare is an individual--not a family--policy.
If they are lucky, a couple might benefit from a retirement plan that includes
health coverage. But increasingly, employers are dropping that costly perk.
Few options. All other possibilities for a retired couple carry substantial
price tags. The spouse of a retiree on Medicare is generally eligible, through
the federal COBRA law, for continued coverage under the former employer's
group policy. "People say you can always do COBRA. But COBRA can be
three or four times what you've been paying," says Mary Ann Holmes,
62, of Orlando. In exploring her options if her husband, John, 64, retires
she discovered she was ineligible for COBRA because his company is too small.
Under COBRA, the employer stops contributing to the cost of the policy,
and the spouse of the retired employee pays the full premium plus 2 percent.
Still, it is usually more affordable and more comprehensive than the next
option, which comes when COBRA runs out.
That's when the younger spouse moves from the world of employer-sponsored
group coverage to the vastly different world of individual coverage. And
unlike general workplace policies, this coverage is not necessarily comprehensive
and the insured may be subject to pre-existing-condition exclusions. Anything
that breaks the link to employer-based coverage means that the uninsured
person must act quickly--within 60 days. And nothing in the law sets a price
cap.
Those ages 55 to 64 pay the highest individual insurance premiums of any
age group because they use more healthcare services than younger people.
Conventional policies can cost close to or more than $1,000 a month. And
that presumes the insured is in good health. Because the price is so high,
nearly 15 percent of people ages 55 to 64 are un-insured, with women more
likely to be without coverage.
Sara Evans jokes about it. "If he retired, I don't know what I'd do.
Just hang around until I qualified for Medicare, I guess," she says.
But she knows that's too risky. She has had some mild heart problems. David
Evans is glad that he continues to love his work. Still, he worries. "Luckily,
I have good health. If I continue to work for five years, I'll be 71. While
I have a good energy level now, I might not at 68. Or at 70," he says.
As people factor healthcare coverage into their retirement plans, for many
it means that at least one is putting off retiring until both husband and
wife reach 65. John Holmes will be 65 in September and has worked as a lawyer
for 38 years. He feels he cannot call it quits because his wife, who had
breast cancer, could be uninsurable without his group policy. "After
38 years of doing this stuff, I really need to get some fresh air, stick
my head up, and look around," said Holmes. "But if I set out to
do something other than what I'm doing, we would no longer be eligible under
the group policy."
The prescription drug nightmare adds to the pressure to keep working. Lary
and Marilyn Belman have been married for 36 years, and, at 63, he has started
thinking about retirement. But Marilyn, 64, has had extensive health problems--seizure
disorder, osteoporosis, scleroderma, a balance problem, and deafness in
one ear. She worked as a schoolteacher and will get disability insurance
until she turns 65. But they have decided the only way they can afford her
medications--which could cost up to $8,000 a year as they're not covered
under Medicare--is for Lary to keep his job as a psychotherapist at a family
service agency in Cedar Rapids, Iowa.
Robert Hayes hears these concerns all the time. Hayes, president of the
Medicare Rights Center (www.medicarerights.org), an independent source of
Medicare information, says seniors increasingly are postponing retirement
because of health coverage worries. "A lot of people continue to work
for that very reason, past 65 and into their 70s," he says. "This
is the generation being hardest hit, and it's hitting women especially hard."
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