Chapters

00:00 Introduction to Health Insurance for Mississippi PERS Retirees

00:38 Understanding Health Insurance Costs Over Time

01:12 Exploring Pre-65 and Post-65 Health Insurance Options

02:09 Overview of State Sponsored Health Plan

04:14 Overview of PERS-Sponsored Medical Insurance Plan

05:12 Overview of Spouse's Employer Sponsored Plans

05:48 Overview of ACA Marketplace

06:59 Overview of COBRA Coverage

08:22 Overview of Medicare and Medicaid

09:54 Action Items for Evaluating Health Insurance Options

10:51 Preview of Next Video and Calls to Action

12:01 Disclaimer

Transcript

Hi everyone, I'm Ryan Earley, vested PERS member, former public school finance officer, current financial planner, and host of the PERS Pro YouTube channel. Today, we are exploring the various health insurance coverage options available to Mississippi PERS retirees, from the state health plan to Medicare and everything in between. Let's get started.

Before we look at the plans, I want to emphasize why health insurance is so important for retirees. In your 50s and 60s, healthcare is often a manageable expense, but as we age, those costs climb significantly.  As you can see in this table, stay relatively flat in your early retirement years. But once you hit your 70s and 80s, the median out-of-pocket expenses skyrocket. For those in the 90 plus age bracket, it is not uncommon to see annual costs exceeding $40,000 due to long-term care needs and specialized services. Without a solid insurance strategy, these rising costs can quickly deplete your monthly PERS pension.

When evaluating a retiree's health insurance options, it's helpful to look at the options pre and post age 65. That is when retirees become Medicare eligible. Your health insurance options, even outside of Medicare, change dramatically the moment you or your spouse hit that magic milestone.  This matrix shows your various options between retirement and age 65, as well as your options post age 65. Pre 65, you can see your main options are going to be your spouse's employer sponsored plan, the state and school health plan, or the ACA marketplace. Most retirees will not select COBRA and we'll go over that later in this video. 

Once you turn 65, most retirees will shift to Medicare as their primary health insurance. This is also when retirees become eligible for the PERS-sponsored medical plan, which is a separate entity from the state and school health plan. If enrolled in the PERS-sponsored medical plan, this plan becomes the Medicare Supplement Plan.

Let's look in more detail at the state and school employee health plan. Most PERS members are familiar with the state sponsored plan. As a retiree, you can continue this coverage if you were enrolled at the time of your retirement. 

Let's look at the 2026 monthly rates for select coverage for both legacy and horizon retirees. You'll notice a significant increase in premium for those not yet eligible for Medicare. For legacy retirees, those hired before January 1st, 2006, the premium for the select plan for retiree under age 65 for retiree only coverage is $614 per month. However, once you turn 65 and become Medicare eligible, that premium drops drastically to $250 per month because the state sponsored plan moves to becoming a secondary payer behind Medicare. For Horizon retirees, those hired on or after January 1st, 2006, there is a similar story.

The other important point I want to make with this table is that legacy retirees who aren't 65 get a large percentage of their health insurance costs subsidized by the state. In fact, if we look at the table, you could say that legacy retirees under age 65 receive an additional $361 per month in health insurance subsidies for select plan retiree only coverage compared to their Horizon retiree counterparts. 

Legacy retirees under 65 also receive an additional $661 per month health insurance subsidy for select plan retiree plus spouse coverage. However, this subsidy largely disappears relative to Horizon retirees once that Legacy retiree reaches age 65. The only exception would be a Legacy retiree who is 65 and has a spouse who is still younger than 65.  In that case, the legacy retiree is still receiving an additional $300 per month health insurance subsidy relative to a Horizon retiree. If you are legacy retiree under age 65, be aware of this advantage. 

PERS sponsored retiree medical insurance plan, often confused with the state sponsored plan, the PERS sponsored plan, administered and underwritten by Transamerica, is specifically for those age 65 and older who are enrolled in Medicare Part A and Part B. The PERS sponsored plan is a great alternative to the state sponsored plan once you hit 65. It functions as a true Medicare supplement, helping to cover the 20 % that Medicare doesn't pay.  Because it's group rated for PERS retirees, the premiums are often more stable than individual policies you might find on the open market. Make note that you must enroll in the PERS sponsored plan within 60 days of retirement or during annual open enrollment. The premiums for 2026 vary by age in plan chosen and range from $109 to $253 per month in 2026. 

Let's look at a spouse's employer sponsored plan.  If your spouse is still working, jumping onto their plan might be your most cost-effective move before you turn 65 and possibly even after you turn 65 if the spouse's plan allows it. If your spouse remains in the workforce, their employer likely pays a portion of the premium, a luxury you largely lose as a PERS retiree, especially for Horizon retirees. Compare your spouse's employee plus spouse rates against the $1,200 to $2,000 per month you might pay staying on the state and school health plan to see if you can save money enrolling in your spouse's plan. 

Let's look at the Affordable Care Act or ACA Marketplace. If you retire early and don't enroll in the state-sponsored plan, the ACA Marketplace is an alternative option, but 2026 has seen a major change in costs. The Marketplace offers flexibility, especially for those with lower retirement incomes who qualify for the subsidies. However, this table highlights a warning I want to give everyone.  With the enhanced premium tax credits expiring December 31st, 2025, monthly premiums could be significantly higher than in previous years. 

As a business owner myself, along with my spouse, we've purchased our insurance through the marketplace for the last nine months and have firsthand experience with the increase in premiums, at least in Mississippi. Even though we didn't qualify for a subsidy or premium tax credit in 2025, we still experienced an increase of about a thousand dollars per month for gold family coverage in Mississippi in 2026. But for retirees who might fall below the 400 % federal poverty level, which currently is $63,840 for a single and $86,560 for a couple, ACA subsidized coverage could still be a competitively priced option compared to the state sponsored plan. 

Let's look at COBRA. COBRA allows you to keep your exact same active Employee Health Insurance Plan for up to 18 months post-retirement, but you pay the full unsubsidized premium plus up to a 2 % administration fee. COBRA is often the most expensive health insurance option available. As shown here, a legacy employee would pay $545 per month for COBRA participant-only coverage under the Select Plan, and a Horizon employee would pay $577 per month for COBRA participant-only coverage under the Select Plan.  While this provides continuity, most PERS retirees find that moving directly to the state-sponsored health plan while under 65 is more advantageous. 

However, there is one exception to this general rule and a unique health insurance planning opportunity for a PERS retiree who is between the age 63 and a half and 65 at retirement, they could select and enroll in COBRA coverage for up to 18 months and actually pay less than they would as a legacy or horizon retiree not eligible for Medicare, which is highlighted in yellow. It gets trickier for those that have a spouse though. Your spouse would also need to be between the ages of 63 and a half and 65 to take advantage of this planning opportunity, though the savings would be even greater if you can take advantage of it.

Finally, we have the federal and state programs that act as your primary coverage either when your income drops significantly or you turn age 65. Medicare is your primary health insurance coverage at 65, but Medicaid becomes relevant if you have a very limited income. In 2026, the individual income limit for dual eligibility where the state helps pay your Medicare premiums is $1,350 per month. Cost-wise, Medicaid enrollees generally don't pay any monthly premiums. 

Medicare enrollees will have three coverage parts to choose from, each with their own premium. Generally, Medicare Part A, hospital insurance enrollees don't pay a premium for that coverage. Medicare Part B or medical insurance enrollees will pay between $203 to $690 per month, depending on their income. And Medicare Part D or prescription drug insurance enrollees will pay between $0 for basic coverage to $141 per month for enhanced coverage. 

It's also important to note that Medicare eligibility and enrollment isn't necessarily automatic once you turn 65. First, you must meet work history requirements, and if you aren't receiving Social Security benefits, you must manually enroll within a 7-month initial enrollment period. This includes 3 months before, the month of, and 3 months after your 65th birthday.  Be aware that late penalties apply if you miss your initial enrollment period, and some of these penalties apply to your monthly premium for as long as you carry that Medicare coverage part.

If you want to evaluate your own health insurance options before you retire, here are your action items for today. One, map out your health insurance options. Create a timeline from the time of your retirement until the time you and your spouse have married turn 65 and map what your health insurance options are at each critical milestone, including retirement, both you and your spouse, significant changes in income, both you and your spouse, and turning 65, both you and your spouse. Two, compare plans. Start gathering coverage and monthly costs for every health insurance option identified on your timeline and compare the plans to one another at each milestone. Three, make note of enrollment deadlines. Based on your health insurance plan selections, make special note of all enrollment deadlines for each plan so you don't miss enrollment and or become subject to late enrollment penalties.

I hope this video helps you navigate the complex world of retiree health insurance. In our next video, we'll explore what return to work options does a Mississippi PERS retiree have. Please make sure you subscribe so you don't miss this and other videos in our new retirement series. If you found this video helpful, can thank me by hitting the thumbs up button and sharing it with other PERS members. If you have a follow up question about PERS or anything else related to personal finance, please visit our website at perspro.ms click YouTube,and submit your question or topic for a future episode. 

And finally, if you're looking for a financial planner that specializes in helping PERS members plan for retirement, including selecting health insurance options, please visit our website at perspro.ms to learn more about our firm and to schedule your initial consultation. Thank you for your valuable public service to the state of Mississippi. We'll see you next time.

Disclaimer, this video is for educational and informational purposes only. Neither the host nor this YouTube channel are officially affiliated with, endorsed by, or sponsored by the Public Employees Retirement System of Mississippi. Always consult a qualified professional for personal advice specific to your situation.