One of the age groups that is hard to insure are those from fifty to sixty-four. Middle aged boomers may be leaving group plans for a variety of reasons, and they need to to find private coverage. However, just when they are the skills and contacts to build their own business, they find that one major stumbling block is the ability to obtain health insurance at an affordable price.
Now unlike younger people, say in their 20s and early 30s, middle aged people understand that health insurance can protect their financial lives if they should become ill or have an accident. You adults think they will live forever, and also, do not risk as many assets most of the time. And yet, it is usually simple to find major medical for younger people. Older adults, those old enough for senior discounts, but not for Medicare, automatically fall into a more expensive rating category, just based on age. But beyond age, middle aged adults are much more likely to have developed some health issues.
The health issues may be minor and controlled. A little extra weight, controlled high blood pressure, and other chronic problems will not exclude them from being accepted for health insurance, but it will often cause rates to be considerably higher, sometimes 25 – 50%. More severe health problems like diabetes, even if it is well controlled, will make an applicant marked uninsurable by most major medical insurance companies. If a person cannot qualify for private insurance, what options are left?
Well every state in the US has some sort of program for people who are considered high risk applicants. Risks pools with guaranteed access are established in some states. However, in some cases these policies do have waiting periods for pre-existing conditions, and these policies also come with hefty premiums. Because these plans are anything but standard across the US, you would need to check with a local insurance agent or your state’s insurance department. If the state program is an expensive high risk pool, I would suggest that an applicant take the highest possible deductible to keep premiums as low as possible.
Some older people have to take a part time job, even a menial job, just to get the health insurance. Then they use the rest of the time to get their business going. Or sometimes one spouse takes the part time job, leaving one free to work full time on the new business. Then when the new business has some momentum, and even has a couple of employees, they can go out and obtain their own small group insurance plan where pre-existing conditions are accepted, or feel as if they have enough revenue coming in to justify the expense of an individual health insurance plan.
However, some older applicants, who have savings and only minor or no health problems, cut their premium another way. These people have built up savings accounts, so they will pick a high deductible medical plan, usually with a Health Savings Account (HSA). A deductilbe of 5 or 10 thousand dollars may seem very high. COnsider that the actual payments for a higher deductible plan will be less, so it is valuable to use some of the savings to start an emergency fund.
HSA plans have some added advantages. Insurance premiums may be tax deductible too. The account may be used for almost any medical expense, and some of these will not be covered by typical major medical plans. Furthermore, if any money remains in the account at retirement, it can be taken withdrawn and is never lost.