Personal Finance | 010 How to Buy Medical Insurance after Retirement

Summary: To purchase medical insurance after retirement, check company benefits first or buy Obamacare if you are under 65. After turning 65, enroll in Medicare and consider purchasing a Medicare supplement policy with Medigap.

Are you considering retirement? One of the top priorities should be securing adequate medical insurance. How to purchase medical insurance after retirement varies based on when you retire.

If you retire before age 65, you will need to obtain general insurance before you can apply for Medicare at age 65. A current option for this is to enroll in the Affordable Care Act (commonly referred to as Obama Care), as you are required to have insurance coverage. You may also check your company policy who normally offers you to buy company insurance when retiring after certain age and until 65. 

Retiring after age 65 is generally more economical. At 65, individuals become eligible for Medicare, the government-sponsored medical insurance. Medicare is divided into three parts:

• Part A: Hospitalization – No premium required.
• Part B: Doctor visits – The monthly fee varies based on the insured’s income, currently ranging between $170 and $578 (as of 2024)
• Part D: Prescription drug coverage – The average monthly cost is approximately $33 (as of 2024)

Keep in mind that Medicare patients are responsible for their own medical expenses, and there is no cap on these costs. For this reason, many opt to purchase additional Medicare Supplement Insurance, such as United Healthcare Supplement, to cover serious illnesses. Details should be discussed with the insurance company directly.

In summary, if you calculate the approximate monthly expenditures, you have about $578 (Part B) + $33 (Part D) + around $98.31 for supplementary coverage, totaling approximately $700 per month, which amounts to $8,400 per year per person.