How to Get Health Insurance Coverage When You Don't Qualify for Medicare
Most people become eligible for Medicare at age 65.
You can start the sign-up process starting six months before your 65th birthday.
Medicare comes in several parts, but Medicare Part A (hospital) coverage is generally free for people who have at least 40 qualifying quarter credits from working.
Once you’re enrolled in Medicare, you often use it for the rest of your life.
People who have worked less than 40 credit hours may have to pay for Medicare Part A.
To make matters even worse for these people, signing up for Medicare after your 65th birthday may result in late sign-up penalties.
This can mean higher premiums.
Some people may not be eligible for all types of Medicare, though.
You may be wondering how to get health insurance coverage without Medicare.
Here are some options you may be able to consider depending on your situation.
General Medicare Eligibility
AARP says you qualify for full Medicare benefits if you meet the following criteria:
- You’re age 65 or older
- You’re a citizen of the United States or you’re a permanent legal resident that has lived in the United States for at least five years
- You receive Social Security or railroad retirement benefits or you’re eligible but not yet claiming those benefits
- You or a spouse is a government employee or retiree that didn’t pay into Social Security but did pay Medicare payroll taxes when you were working for the government
You may also qualify before age 65 in other ways. Common other methods include having Lou Gehrig’s disease or permanent kidney failure.
If you don’t meet all of these criteria, you may be eligible for partial Medicare benefits.
However, having full health coverage is essential for seniors when medical costs are a significant portion of retirement expenses.
Here are a few alternatives if you don’t qualify for full Medicare benefits.
Medicaid is a health insurance program run by states and funded by the federal government and states.
Typically, Medicaid is for people with low incomes or disabilities.
This can extend to seniors with low incomes or disabilities, as well.
Each state’s Medicaid program works in slightly different ways depending on their specific circumstances.
For this reason, there are no overall eligibility criteria for the entire United States.
Instead, you need to look into your state’s program to find out if you’re eligible or not.
Some states have expanded Medicaid coverage while others have not.
Normally, states have both income and asset limitations you must fall below to qualify for coverage.
However, the general rule of thumb is you must make no more than 200% of the federal poverty level plus $20.
This can vary based on where exactly you live.
If you do qualify, Medicaid may help you pay your Medicare premiums and out-of-pocket medical expenses.
In some cases, you get free coverage without paying premiums.
In other instances, you get low-cost coverage.
Some people may have both Medicare and Medicaid.
If this happens, both may cover some of your costs.
First, Medicare covers costs according to their rules. Then, Medicaid will step in and cover anything your state’s Medicaid program covers up to applicable limits.
Medicaid can also cover certain medical costs not typically covered by Medicare.
This includes nursing facility care beyond the 100-day limit, eyeglasses, hearing aids, and even prescription drugs.
This can be useful if you need long-term care.
Just because you qualify for Medicare at age 65 doesn’t mean you stop working.
Many seniors continue working well after their 65th birthday. Some even decide to work their entire lives.
This may be due to necessity or due to a love for one’s profession.
Either way, working seniors may have access to another health insurance option.
If your employer offers a group health insurance option as an employee benefit, you can usually sign up for their health insurance plan.
Generally, this is the case for employers with 20 or more employees.
However, employers with less than 20 employees typically require you to sign up for Medicare rather than employer health insurance.
Employer health insurance plans can be a great benefit for seniors.
Typically, employers subsidize their health insurance plans.
This means they pay part of the premiums of the health insurance plans.
In rare instances, an employer may pay for the entire health insurance plan’s premium payments.
This premium assistance may be only for the employee.
Your employer may occasionally extend this subsidized insurance benefit to your spouse for a family plan.
What’s even better is the portion of premiums you have to pay are usually made pre-tax.
That means you don’t have to pay income taxes on the money used to pay for your part of the health insurance premiums.
With health insurance plans increasing drastically in cost, these two perks can be a massive benefit for qualifying seniors.
Employer plans may work differently than Medicare, too.
Depending on the plan, the deductibles, co-pays or co-insurance may be more affordable than Medicare’s requirements.
Not all companies require you to work full-time to qualify for coverage, either.
If you need health insurance and can’t afford or can’t get Medicare, you may want to seek out an employer that gives health insurance benefits for part-time work.
Health Insurance Marketplace
Healthcare.gov says if you’re 65 or older and not eligible for Medicare coverage, you may have an option.
You may even qualify for premium tax credits.
As long as your income falls below certain specifications and you otherwise qualify, these can lower your health insurance premiums.
Some states run their health insurance marketplace. In this case, you apply through your state’s site.
Other states let Healthcare.gov run their marketplace. In those states, you apply on Healthcare.gov.
When You Can Apply
You can usually apply for coverage during two periods.
The first is the open enrollment period.
Open enrollment typically occurs at the end of a year, around November and December.
During this limited time window, you can enroll in a plan through the exchange.
You could sign up for a plan if you didn’t have one previously.
Even if you already have a plan, you can change plans during this time.
The plan you choose will take effect for the following year.
The second is a special enrollment period.
You have to qualify to use a special enrollment period. This usually happens through a life event.
Qualifying life events include having one of the following happen to you or someone in your household:
- Getting married
- Having a baby
- Adopting a child
- Placing a child for foster care
- Getting divorced and lost health insurance
- Getting legally separated and lost health insurance
- Changing residences
- Moving to a home in a new zip code or county
- Moving to the United States from a foreign country or U.S. territory
- Moving from school as a student
- Moving to the place you live and work as a seasonal worker
- Moving to or from a shelter or other transitional housing
- Losing health insurance in the following ways:
- Losing job-based health insurance
- Losing individual health insurance you bought yourself
- Losing Medicaid or CHIP eligibility
- Losing Medicare eligibility
- Losing coverage through a family member
- Becoming a U.S. citizen
For marketplace plans, your special enrollment period typically starts 60 days before or lasts 60 days after your life event.
During this time, you can enroll in a plan or change plans.
This allows you to find a plan that makes sense based on your new life circumstances.
Unfortunately, changing plans mid-year means your plan starts over.
Your deductible and other plan features don’t carry over to the new plan.
No matter which option you choose, you enroll by filling out a marketplace application.
You can get started here for Healthcare.gov states.
Consult an Expert
Figuring out your health insurance options can be confusing.
You want to do what makes the most financial sense.
Unfortunately, these decisions can have long-lasting impacts.
If you qualify for Medicare but don’t sign up at the right time, you may face higher premiums for the rest of your life.
If you have questions about Medicare, you can always visit the Centers for Medicare & Medicaid Services website.
Even so, this can be confusing for someone who doesn’t understand the terminology.
You also may have options outside of Medicare. These could include Medicaid, employer coverage, or healthcare marketplace coverage.
If you need help understanding these options and their impacts, you should consult an expert.
A health insurance broker should be able to explain the pros and cons of each option you have available.
They do get paid on commission, though.
If you feel the commission will influence their recommendations, you can consult a fiduciary expert.
These experts must give you advice based on your best interests.
In particular, a fiduciary fee-only financial planner may be able to help. These professionals do not accept commissions.
You do have to pay them for their time, though.