Savvy Senior : Health insurance options after a spouse retires

Dear Savvy Senior,

My 63-year-old wife, who’s doesn’t work, is on my health insurance plan through my employer. When I retire next month and go on Medicare, what are our options for getting her health coverage until she turns 65? Is there some kind of Medicare coverage for dependent spouses?

— Need Insurance

Dear Need,

Unfortunately, Medicare does not provide family coverage to younger spouses or dependent children when you qualify for Medicare. Nobody can obtain Medicare benefits before age 65, unless eligible at a younger age because of disability. With that said, here are your best options for covering your wife.

Affordable Care Act: In most cases, your best choice is to get your wife an individual health insurance policy through the Affordable Care Act (ACA) health insurance Marketplace (a.k.a. Obamacare). The Marketplace offers comprehensive health coverage, and she won’t be denied coverage or charged extra for preexisting health conditions.

And thanks to the American Rescue Plan and Inflation Reduction Act, the Marketplace now provides enhanced subsidies through 2025. If your income falls below the 400 percent poverty level after you retire – anything below $73,240 for a couple or $54,360 for a single in 2023 – your wife will be eligible for a tax credit that will reduce the amount you’ll have to pay for her policy. The Marketplace also ensures that households with incomes above that 400 percent poverty level will not have to pay more than 8.5 percent of their income for a benchmark policy.

To see how much subsidy you may be eligible for, use Kaiser Family Foundation calculator at KFF.org/interactive/subsidy-calculator.

To shop for Marketplace plans in your state, visit HealthCare.gov or call 800-318-2596. Or, if you want some extra help, contact a Marketplace-certified agent or broker at HealthCare.gov/find-assistance.

COBRA: Another option is the Consolidated Omnibus Budget Reconciliation Act (COBRA), which is a federal law that would allow your wife to remain with your company insurance plan for at least 18 months after you make the switch to Medicare. But not every employer plan is COBRA eligible. Contact your employer benefits administrator to find out if yours is one of them.

You also need to be aware that COBRA is not cheap, requiring you to pay the full monthly premium yourself. But, if you’ve already met or nearly met your employer plan’s deductible or out-of-pocket maximum for the year, and don’t want your wife to start over with a new plan; or if you find your employer’s health plan to be more affordable than the Marketplace plans, it makes sense for your wife to keep her current coverage under COBRA.  

Short-Term Health Insurance: If you can’t find an affordable Marketplace plan and COBRA is too expensive, the next option is short-term health insurance. These plans, which are not available in every state, are cheaper, bare-bones health plans that provide coverage for one to 12 months and may be renewed for up to three years in some states. But be aware that short-term plans don’t comply with the ACA so they can deny sick people coverage, they don’t cover preexisting conditions, and they can exclude coverage essentials like prescription drugs.

To find and compare short-term health plans, try sites like eHealthInsurance.com or PivotHealth.com.

Healthcare sharing ministries: One other coverage option you should know about is healthcare sharing ministries (HCSM). These are cost-sharing health plans in which members – who typically share a religious belief – make monthly payments to cover expenses of other members, including themselves.

HCSM’s are cheaper than paying full out-of-pocket costs for traditional health insurance but be aware that HCSM’s are not health insurance. They don’t have to comply with the consumer protections of the ACA. They can also reject or limit coverage for having pre-existing health issues and can limit how much you’ll be reimbursed for your medical costs.

To look for HCSM plans, comparison shop at the three largest providers: SamaritanMinistries.org, MyChristianCare.org and Chministries.org.

Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.