Healthcare Crisis Hits Early Retirees Hardest

The generation of unemployed or retired 50-somethings could really stand to benefit from the Patient Protection and Affordable Care Act. But they have a year to wait, and that year will be a crucial one indeed.

These 50-somethings are undergoing what Reuters refers to as a “healthcare crisis.” If they are retired or out of work before turning 65, they can't receive Medicare. But more often than not, even early retirees don't continue to receive healthcare from former employers.

In fact, that number has been shrinking for the past several decades. While in 1997, 28% of early retirees continued to receive coverage from their employers, today that is just 17%.

And finding coverage can be difficult, if not impossible.

Reuters references a survey by eHealth, Inc., which found the average monthly premium for healthcare over all age groups is $279. But for those between the ages of 55 and 64, it's $588. And that's just the average.

Part of this problem correlates directly to pre-existing conditions. Healthcare premiums can skyrocket for these – especially for those leaving their jobs and forced to find new coverage.

A law in the Affordable Care Act will prohibit companies from denying healthcare coverage to people with pre-existing conditions, and even from raising the rates. But that won't go into effect until January 1, 2014.

And for those aged 55-64 – especially those with pre-existing conditions – that's too long to wait. Besides, there's no guarantee it will lower costs sufficiently.

But if you're an early retiree, there are some measures you can take to find the best coverage now.

The first thing Reuters recommends is that you take stock of everything you need from a healthcare plan. That includes everything from daily medication to doctors and specialists you may require. The cheapest plan might not always cover this, so be aware that paying less upfront can lead to higher overall costs.

Another highly recommended move is seeking professional advice. Whether this is from a financial advisor or a private insurance exchange (a company that compares rates on a number of insurance plans), you should sit down with someone who can help you find the best plan for you and your budget.

And that's where these exchanges come in. Private exchanges “offer policy seekers dozens of plans to choose from in a retail experience not dissimilar to buying a airline ticket online from Travelocity or a book from Amazon.com, Inc.,” Reuters reports.

Many 50-somethings could be facing a big dilemma: get healthcare or hang on to retirement savings. Considering that the average American only has enough savings to cover 67% of his or her retirement, this can be even more straining. For the unemployed, it's even worse.

But there are options. And the most important thing is to review those options – rather than jumping in too quickly and finding yourself either without appropriate coverage or without retirement savings.