In the past, it was somewhat common for a person to work the majority of his or her career at the same company, receiving health benefits the entire time. This often extended to retirement, when former employees and their families would continue to receive health insurance before they became eligible for Medicare coverage.

Now, because of a number of different factors, this type of comprehensive health care coverage throughout a career and into early retirement is extremely rare.

According to an August 2007 U.S. Census report, the percentage of people receiving health insurance coverage from their employer decreased from 64.2 percent in 2000 to 59.7 percent in 2006. Even fewer companies are offering health insurance to retirees, and when you combine this trend with Americans switching jobs more frequently, going the self-employed route, and retiring prior to Medicare eligibility, you have many more people in their 50s and early 60s searching for health insurance.

Unfortunately, the decrease in employer-based insurance has come about as the cost of health care during retirement has continued to rise. According to a March 2008 estimate from Fidelity Investments, a 65-year-old couple retiring in 2008 would need approximately $225,000 to cover their medical costs in retirement, an estimate that has increased 41 percent since it was first calculated in 2002.

In response to this problem, some organizations have developed health insurance products that can be purchased by individuals, rather than through an employer. These types of products give individuals more flexibility if they are between jobs, starting their own business or retiring early.

In one of the more unique, targeted offerings in this area, AARP has selected Aetna to make health insurance options available to AARP members between the ages of 50 and 64. This product, called AARP Essential Premier Health Insurance, is insured by Aetna and was first offered to consumers in January 2008. It is currently sold in 27 states and Washington, DC.

“There are approximately 18 million AARP members in this age group, and a significant number are uninsured or underinsured,” says John Wider, executive vice president for AARP Services, Inc. “These products can provide a tremendous opportunity for affordable, high-quality coverage for millions of Americans.”

Picking the Right Plan

While these plans have been designed for one specific age group, there is still a wide range of insurance needs based on differing personal situations. Because of these varying individual circumstances, AARP makes available seven different plan options designed to meet a variety of needs in terms of both coverage and cost.

“You might have a 54-year-old single female in Connecticut who is looking to start her own business, or a 62-year-old-man who just retired with his wife and is preparing to move to Florida,” says Frank McCauley, senior vice president and head of Aetna’s Consumer Business Segment. “Just because they fall into the same age demographic does not mean they would need the same type of insurance plan.”

Both Wider and McCauley mention several important factors that early retirees should consider when purchasing an individual insurance option:

* Helping to Keep you Healthy – Aside from the health and financial security provided through these plans, many insurers offer health management programs that place an emphasis on enhancing the quality and outcomes of health care, prevention and wellness.

McCauley says these programs, as well as online tools and services, can help individuals become more engaged in their health care and make more informed health care decisions.

* Don’t Just Think of Yourself – According to Wider, one of the most important features of the new AARP plans is dependent coverage. Spouses, children and grandchildren are all eligible for dependent coverage. In addition, if an AARP member already has coverage he or she is happy with, the member can still seek coverage for dependents without personally enrolling in a plan.

* Advantages with ‘Uncle Sam’ – McCauley notes that several of the high deductible health plan options made available by AARP through insurance providers are compatible with a tax-advantaged Health Savings Account (HSA). With these accounts, consumers can make tax-free contributions to help save for future medical expenses, and they earn interest on these contributions tax-free. When they need to, consumers can then withdraw funds for qualified medical expenses tax-free as well. Two other benefits to these plans – the funds can roll over from year to year, and the individual owns the account, even if he or she changes insurance plans.

The differing needs of individuals within this group extends to the way they obtain information, so AARP has developed several ways its members can learn about these plans, including the Web site: www.AARPhealthcare.com. Aside from the Web site, members can learn about these plans by calling (866) 844-0888 or from insurance brokers authorized to offer these plans in their area.

“As more and more ‘baby boomers’ enter this age group and are comfortable making purchases of all kinds on the Internet, we want to continue to improve our site, but still give our members the opportunity to speak with trained professionals if they want,” Wider says. “We think these plans can truly address the needs of a large number of AARP members, so we want to make sure they are aware of them.”

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