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Vanishing retiree health care benefits

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The decline of retiree health benefits
Courtney C. Coile, assistant professor of economics at Wellesley College and a research associate of the Center for Retirement Research at Boston College, says the number of companies with 200 or more workers that offer retiree health insurance fell from 66 percent in 1988 to 33 percent in 2005.

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The trend continues in the private industry and government. "Future retirees are less likely to have retiree health insurance and those who (do) are likely ... to pay more for it," says Coile.

Health insurance doesn't come cheap, even when you're young and healthy. But as you age, becoming more prone to disease and illness, it skyrockets. Until Medicare eligibility kicks in at 65, many Americans who retire before then are left with few health care options.

Health insurance backstops
What can you do if you're contemplating retirement before you reach Medicare eligibility and you lose health insurance benefits?

Here are some expert suggestions:

  • Before you take any action, find out where your state stands on health insurance. Take a look at the Georgetown University Health Policy Institute's consumer guide, which is a state-by-state rundown summarizing your rights and the protections available to you under your state laws.

  • Check to see if you qualify for another group plan -- perhaps through your spouse's employer or a fraternal organization. Can you join a professional or social group that carries member insurance? Find out. It may be worth becoming a part of the organization simply for the health insurance.

  • Like Ron Harper, buy an individual plan with a high deductible. Many dislike individual policies because they often come with high deductibles and pay for little or no routine care. But even if you set aside the money you save by not paying the premiums and don't spend it, if faced with a catastrophic illness, you may quickly run through your savings and find yourself with a mountain of unpaid medical bills.

  • Don't change jobs unless you know the status of your health insurance. Does your new company offer it? What will it cost? Can you qualify for COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) benefits? Research your rights under HIPAA (Health Insurance Portability and Accountability Act of 1996) before changing insurers.

  • Start living a healthier lifestyle right now. Don't neglect preventive medicine. Have annual physicals and other routine tests as you age. Keep your teeth and gums in top-notch condition. Exercise, eat right and quit smoking. The healthier you are when you retire, the less medical attention you will need.
Next: "Government employees are also getting nasty surprises."
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