Unlocking Your Health Insurance Options as You Approach Retirement

Did you know that more than 1 in 3 people who divorce in the United States are age 50 or older? And 1 in 4 are 65 or older? These statistics come from a 2022 analysis published in the Journals of Gerontology. Divorcing as you near retirement—or after you’ve retired—comes with a unique set of considerations, particularly when it comes to health insurance. If you’re retired but not yet eligible for Medicare, where will you find coverage? How does being an ex-spouse affect your Medicare costs? These are important questions to ask. Plus, if you have health insurance through your own employer, not much will change. But if you’re on Medicare or your partner’s employer policy, there are some things you need to know. Here are some points to consider, according to the AP:

• Employer benefits: If you’re still working, it’s worth finding out if your employer offers health coverage. Divorce is considered a life event that will qualify you to make changes to your benefits, such as enrolling in a health insurance plan. You have a 30-day window after your other coverage ends to request special plan changes.

• COBRA access: If you were covered under your ex-spouse’s employer plan, you can opt in to coverage under COBRA—the Consolidated Omnibus Budget Reconciliation Act—for up to 36 months after the divorce. COBRA applies to group plans of employers that have at least 20 employees. However, be prepared for the insurance cost to be substantially higher, as you will now be responsible for paying the entire premium amount. Tamara Durbin, a certified financial planner in California, advises considering your ex-spouse’s coverage before opting for COBRA. Crystal Cox, a CFP in Wisconsin, lists her husband’s health insurance as “amazing” and says she would strongly consider COBRA if they were to get divorced.
• Marketplace considerations: Many people find COBRA to be expensive, and it’s only a temporary solution. If you’re looking for other plans that meet your needs and budget, consider shopping on the government health insurance marketplace. Start at healthcare.gov or check if your state has its own marketplace site. If you’re unsure about choosing a plan, a health insurance broker in your state can provide free guidance.
• Medicare eligibility: If you’re 65 or older and haven’t signed up for Medicare yet because you’ve been on your ex-spouse’s employer group plan, now is the time to sign up. Losing coverage from an employer qualifies you for a special enrollment period, even outside of the typical open enrollment period. Melinda Caughill, co-founder and CEO of 65 Incorporated, which offers guidance on Medicare, recommends taking action before your coverage ends to avoid a gap in coverage.

Find out more about what happens if you’re already on Medicare. (Read more health insurance stories.)