How to budget for health care costs between jobs or before Medicare

Writer: Jack Lowenstein
Published: Updated:

Skyrocketing health care costs can blow almost anyone’s budget, so how do you protect yourself and make sure you’re covered?

Sharon Kudingo of Lehigh Acres is no stranger to hard work, at times holding up to three jobs at once.

“I was a waitress, also a bartender,” Kudingo said. “I worked for Winn-Dixie at night and once in a while a babysitter.”

Kudingo, a single mom of three, spent decades doing everything she could to keep her family afloat.

“They had a place where they sold dented cans like tomato sauce or something,” Kudingo said. “And they were like a nickel, so I’d buy them and we had free food from down at the church.”

Now, Kudingo’s children have grown up and her home is paid off, so at 64 years old, she called it quits.

“I decided I’m going to take an early retirement, so I put in my resignation Dec. 20,” Kudingo said.

While she knew she’d lose her health benefits, she didn’t realize how much that’d cost her.

“I was thinking maybe $400 at tops?” Kudingo said.

Instead, she got hit with sticker shock.

“They want to close to $700 a month, and I could not afford that,” Kudingo said.

That’s for Cobra, and that $700 price tag accounts for nearly three-quarters of her income. She missed the 60-day deadline for marketplace health insurance. And short-term plans under $400, she learned, would not cover her pre-existing conditions.

“Health care for an individual is probably their second-largest expense annually just in premiums,” said Jonathan Hess, who works for Athos. “And they don’t realize it because right now your employer probably pays for it.”

Athos is a health care consumer advocate group. Hess said if you want to retire early or are out of work, compare prices.

Cobra – good for up to 18 months – is an extension of the plan you had through work – except you’re also picking up the employer’s portion of the tab. You can find that on your W-2, line 12 DD.

Marketplace insurance, or the Affordable Care Act, is private company plans dictated by government rules. To estimate costs, use the tool on Pre-existing conditions are covered, but prices can be higher.

Finally, while short-term or catastrophic plans can be cheaper, they often have costs with restrictions.

“If you have a history of heart issues, as an example, and then you have a heart attack, these catastrophic plans don’t necessarily cover it,” Hess explained.

Kudingo hopes that come open enrollment in November, she’ll get lower rates through marketplace insurance, based on her income. Until then, she’s paying cash for her medications and doctor visits.

“My warning is check to see what your Cobra is,” Kudingo said. “Make sure you got enough money in the bank if you want to use it, or stay healthy.”

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