NAIC News Release



What Retirees Need to Know About Medicare,
Health Insurance Options

KANSAS CITY, Mo. (Feb. 26, 2008) - The first waves of baby boomers turn 62 this year and begin claiming Social Security benefits. And, according to new research from the National Association of Insurance Commissioners (NAIC), many are confused about their post-retirement health insurance options, including their Medicare eligibility.

The NAIC's national survey of 377 baby boomers - Americans born between 1946 and 1964 - found that only 36 percent correctly knew that Medicare eligibility begins at age 65. Twenty-one percent thought Medicare coverage began at age 62; 9 percent said age 67; 6 percent said age 59; and 28 percent said they were unsure of the age.

The NAIC survey also found:

  • A large majority of baby boomers - 84 percent - said that access to health insurance was important when choosing a retirement date.
  • However, only 43 percent said that Medicare eligibility was an important factor in determining when they would retire.
  • But nearly half - 48 percent - said they expected to use Medicare to cover their healthcare needs during retirement. This number increased to 57 percent among older baby boomers, those 55-62 years of age.

In addition to these findings, the NAIC survey also revealed a considerable lack of familiarity with Medicare's coverage options. Sixty-six percent of respondents said they were "not very familiar" or "not at all familiar" with options such as Medicare Part B, Medicare Advantage plans, Medicare prescription drug coverage and Medicare supplement (Medigap) insurance. This number jumped to 72 percent among younger baby boomers, those 44-54 years of age.

A high level of concern about Medicare's viability also added to the confusion. Eighty-two percent of those surveyed said they were concerned that future funding for Medicare might not be sufficient to provide the healthcare services they anticipate needing throughout their retirement.

"Clearly, there is much confusion and concern among baby boomers regarding their future access to Medicare," said NAIC President and Kansas Insurance Commissioner Sandy Praeger. "Many boomers incorrectly think Medicare coverage is available at age 62, when they initially become eligible for Social Security benefits. With growing concerns about health insurance costs and access, these aging members of our society need to be better educated about Medicare's timing and entitlements so that they can make informed retirement decisions."

The NAIC offers tips and considerations through its public education program, Insure U - Get Smart About Insurance, at

Understanding the Basics of Medicare

Medicare is the largest health insurance program in the nation, covering more than 40 million Americans. The federally funded program is available to Americans 65 years of age and older, regardless of their eligibility for Social Security retirement benefits.

Some Americans younger than 65 may qualify for Medicare, depending on their physical health. For example, those who are disabled may be eligible before reaching their 65th birthday.

Medicare is divided into four parts, each with different coverage options, including hospital insurance (Part A), medical insurance (Part B), Medicare Advantage (Part C) and prescription drug coverage (Part D). Although many Americans do not pay a monthly premium for Medicare Part A, individuals seeking additional coverage options under Parts B, C and D typically pay a monthly premium.

"Baby boomers need to get smart about their health insurance needs when planning for retirement," said NAIC Executive Vice President and CEO Catherine J. Weatherford. "Consumers should take the time to familiarize themselves with Medicare by visiting the federal government's Web site, We also encourage baby boomers to visit the NAIC's Insure U Web site,, to get additional information on their health insurance needs."

Ten Tips Regarding Health Insurance and Retirement from the NAIC

1. Plan ahead for your retirement health insurance needs. Americans are eligible for Medicare at age 65, so take this into consideration if you plan to retire at an earlier age.

2. If you plan to retire from your job before the age of 65 and are not eligible for Medicare, check to see if you are eligible for COBRA (Consolidated Omnibus Budget Reconciliation Act). COBRA is a federal law that typically entitles you to continue your employer's health insurance coverage for up to 18 months. Check with your state insurance department to learn about COBRA laws in your state.

3. If you are not eligible for COBRA, you might want to consider a catastrophic or high-deductible medical plan, which typically carries lower premiums than other individual policies. Keep in mind that people with serious pre-existing health problems - such as heart disease, diabetes or multiple sclerosis - typically cannot get catastrophic health insurance.

4. Before you become eligible for Medicare, you might want to consider purchasing a major medical plan to cover doctors' visits, drugs and hospital care. These plans, which can vary in costs and medical benefits, include indemnity plans, preferred provider organization (PPO) plans, health maintenance organization (HMO) plans and point-of-service (POS) plans.

5. Take time when researching individual health insurance plans and learn what kind of policies will provide the coverage you need - then pick the one best for you. Shop around and ask a lot of questions. To avoid purchasing a fraudulent health insurance plan, call your state insurance department and find out whether the insurance agent and company are licensed in your state. Information about how to contact your state insurance department can be found on the NAIC Web site,

6. If you are 65 years of age or older and will be using Medicare as your primary health insurance, make sure you understand the different coverage options available to you. When enrolling, you will need to decide whether you want traditional Medicare or a Medicare Advantage plan. Before purchasing a Medicare Advantage plan, find out which hospitals and doctors are in-network.

7. When enrolling in Medicare, you might want to consider purchasing a separate Medicare supplement (Medigap) insurance policy to pay for medical/hospital expenses and deductibles not covered by Medicare. Contact Medicare,, for a list of approved Medicare supplement (Medigap) insurance providers.

8. When choosing Medicare options, you might also want to consider enrolling in prescription drug coverage (Medicare Part D), which will help pay for the cost of medications prescribed by your doctor during treatment. Keep in mind, if you choose to waive this coverage during enrollment, but enroll at a later date, you will pay a penalty fee.

9. Be wary of health discount cards. Discount cards are not insurance! If you are considering the purchase of a health discount card, investigate whether the company is legitimate and whether any complaints have been filed against them. Also research what types of services the discount card covers and whether your physician/dentist accepts the discount card. Contact your state insurance department, attorney general's office and/or Better Business Bureau for more information.

10. Consider purchasing long-term care coverage. This type of insurance covers the cost of services for nursing homes, assisted-living facilities and in-home caregivers when individuals are unable to perform activities of daily living - such as eating, dressing and bathing. However, long-term care insurance isn't for everyone. If you are currently receiving Social Security or expect to have minimal or no retirement savings, you will likely qualify for state aid and should not purchase long-term care insurance. Be wary of advertising that suggests Medicare is associated with a long-term care policy. Medicare does not endorse or sell long-term care insurance.

About the NAIC

Formed in 1871, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC has three offices: Executive Office, Washington, D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office, New York City.

The NAIC serves the needs of consumers and the industry, with an overriding objective of supporting state insurance regulators as they protect consumers and maintain the financial stability of the insurance marketplace. For more information, visit

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