Retired early? Don’t move, literally, without checking on your health insurance
- March 24, 2010
- 2 comments
- Posted in Health Insurance, Latest Posts
We all know that health insurance can lock you into a job. You don’t dare switch companies or start your own business unless you know that you can get coverage at a price you can afford.
What probably haven’t thought about is that retiree group health insurance can also lock you into the city where you’re living now. So can an individual policy. You might not be able to take your current plan with you if you move away. You might not even get benefits while you’re spending a few months in a second home. Everything depends on your insurance company and the type of plan you have.
If you’re in an HMO, you’ll lose access to care unless the HMO has facilities in your new town. If you’re in a company plan and a PPO is also available, find out if it’s portable. If so, switch to the PPO before you retire.
If you’re in a company PPO that gives benefits to retirees, and it’s a national plan, you might be able to carry it to another city or state. Your new doctors would still be considered in-network, although your premiums and co-pays would almost certainly change. If it’s not a national PPO, you’d probably be able to keep it, but you’d have to pay your doctors out-of-network prices. That’s too expensive, over time.
If you’re in an individual PPO, ask your insurance company whether you can transfer the plan to your new city. It all depends on the plan. Blue Cross/Blue Shield, for example, generally says no—you’d have to apply for a new plan and go through medical underwriting all over again. Aetna says yes, for its Aetna Advantage plan which operates in 30 states. Your new Aetna plan would differ from your old one, due to different state requirements, but you wouldn’t be treated as a new applicant.
If you move anyway and drop your current plan, you’ll have to apply for new coverage from scratch. Whether you get it, and whether it’s affordable, will depend on your wallet and your health. It’s madness to move before you’ve checked this out.
Under health insurance reform, you would still be locked into the doctor network that your individual or retiree group coverage provides. The difference is that you might be able to afford a new policy if you dropped your current coverage and moved away. (You’ll have to wait for the insurance exchanges in 2014 to find out for sure.)
So don’t buy that Florida bungalow (or, if you’re a Floridian, that cottage on a Michigan lake), as long as your current policy looks better than anything else you could buy. When you reach 65, your plan will probably turn into some sort of Medigap coverage, doing little more than filling the holes in Medicare. At that point, take another look. You might decide that buying a new policy is worth it, just to be able to get out of town.
Tags: health insurance reform, individual health insurance, retiree health insurance
I’m in the process of buying individual health insurance right now. Coincidentally, I’ve been accepted by Aetna and BlueCross BlueShield for similar premiums and am reviewing the plans to make my decision. I’m 56 and pretty healthy right now. We live near a state line and could potentially move across the line later. I didn’t see anything in the policies about this – but I wasn’t looking for it. If I were to choose Aetna, what’s to stop them from changing this policy later?
Yes, they can change or limit coverage. They have to give you a certain amount of notice. Each state has its own procedures. If you think you might move across the state line, find out what would happen to the policy you’re thinking of buying.