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Don’t retire naked

By Jennie L. Phipps ·
Wednesday, February 16, 2011
Posted: 1 pm ET

Don't retire naked.

Leaving health insurance out of your retirement planning is a risky idea. Two-thirds of personal bankruptcies are the result of medical expenses, according to a study by the American Institute of Certified Public Accountants.

Beginning this year, the government has expanded its Pre-Existing Condition Insurance Plan, or PCIP. The program is part of the Affordable Care Act, which was signed into law in March 2010. This year, PCIP will cover people in 23 states and the District of Columbia through a federally managed plan. The remaining states have a privately managed option.

If you have a condition that prevents you from buying regular insurance, this program could keep you from having to live without coverage. If you're thinking about retirement and you don't have health insurance, check out this program and see if it could help you stay covered until you're eligible for Medicare.

To apply under this plan, you'll need evidence that you've been turned down by at least one insurance company. The specific instructions are here. Eligibility isn't based on income, but you must have been uninsured for at least the last six months. If you're eligible for Medicaid, that might be the better option.

The plans are cheaper than they were initially. The 2011 standard plan now has two separate deductibles -- a $2,000 medical deductible and $500 drug deductible. A new plan option, called the extended plan, has a $1,000 medical deductible and $250 drug deductible plan. The health savings account, or HSA, plan carries a $2,500 deductible.

Premiums vary by state and they aren't cheap. In Florida, for instance, the standard plan is $626 per month and the extended is $842. But living without insurance when you are older and nearing retirement can be an enormous financial risk.

So far, only about 12,000 Americans have signed up for one of these plans, the government says, but Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, or CCIIO, which operates the program, expects the numbers to increase. "We are working every day to get the word out about this program, to find people who have been abandoned by the health insurance industry to get them the coverage they have been denied for so long," he says.

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Jennie Phipps
February 17, 2011 at 12:43 pm

These programs are confusing and I misread the requirements. To qualify, you must have been uninsured for six months and be turned down because of your health for six months. I'm sorry for the confusion.

Jennie Phipps
Retirement Blogger,

Cindy Butler
February 17, 2011 at 12:15 pm

Jennie - please check with or the National Finance Center responsible for PCIP enrollment and eligibility. The requirement is for one letter of denial from an insurance company, not two.

February 16, 2011 at 7:02 pm

Your article states: "you must have been uninsured for at least 12 months" The government website states 6 months.

Q: Who is eligible for Pre-Existing Condition Insurance Plan?
A: To be eligible for the Pre-Existing Condition Insurance Plan,

* You must have been uninsured for at least the last SIX months.