Now that health care reform has passed, many people are waiting impatiently to see the payoff. Well, one provision of the reform package is aimed directly at midlife adults who are without insurance in early retirement.
As a person gets older and starts considering retirement, health benefits become more and more important. Yet, many people ages 55 to 64 are forced to give up their health benefits if they retire early. Due to expensive coverage for individual health insurance plans or a preexisting condition, many early retirees are left without health insurance when they retire.
Less than half of those in the 55 to 64 age bracket work full-time, yet their health spending is about 50 percent higher than those in the 45 to 54 age range. At the same time, in 2008, only 31 percent of large firms provided health coverage to early retirees, compared to 66 percent in 1988. The high health spending and lack of employer-provided coverage causes many Americans to delay retirement so they can afford health coverage.
The Affordable Care Act of 2010 includes provisions to help people ages 55 to 64. The new health insurance reform law includes a retiree reinsurance program that will help provide health insurance coverage for early retirees. Under the program, businesses around the country will have access to $5 billion in financial assistance to help employers with reinsurance for early retirees. The employer plan will receive up to 80% of costs per early retiree, for use in lowering costs, including premium contributions, copayments, and deductibles.
Health insurance reform will also benefit early retirees by controlling the costs of coverage and strengthening the Medicare program. The changes in health care through the Affordable Care Act mean that people ages 55 to 64 are likely to receive better and cheaper care as they age.
