I have had one overriding worry since I retired: health insurance. I've read the horror stories about obtaining health insurance and worried that even if we could get coverage, the cost would be bankrupting. I handled this worry the way I handle most of my worries, denial and procrastination.
Well, it's not that bad; here's what I learned:
Do not pass up COBRA coverage when you leave your job. This is pretty much the only guarantee that you will be able to obtain reasonable coverage in the future. When you leave your job, you can elect COBRA coverage to continue the insurance you had while you were employed for an additional 18 months. (Your state may extend this period even longer.) Our monthly premium under COBRA was $600.
Start shopping immediately for an individual policy. I knew I could save on our premium if we could purchase a plan with a higher deductible. I contacted a broker. She told me that because of our health history, we were not insurable and it was not even worth submitting our application to insurers. She recommended that we stay on COBRA for the full COBRA period because at the end of that time we would be guaranteed coverage under HIPAA.
After you exhaust your COBRA coverage, you are guaranteed coverage under HIPAA. In California (very helpful publication here) the rules require that insurers offer their 2 most "representative" policies to those that are eligible for guaranteed issue. The cheapest policy I could find on-line under guaranteed issue would have doubled our premiums to more than $1,200. (It's guaranteed coverage, not guaranteed to be cheap!)
Do not rely exclusively on insurance brokers. When you apply for an individual policy outside of the guaranteed issue provisions, you must go through the insurance company's underwriting process, which includes providing a very detailed health history. At the end of this process, they are not required to offer you insurance.
Before our broker told us we were uninsurable, I had already submitted an application for an individual policy directly with an insurance company. Turns out we are insurable and at a premium half the cost of my COBRA coverage! (I'm not sure why the story was different from a broker--perhaps the commission structure?)
Select your policy carefully; this may be the policy you have for many years. HIPAA insures guaranteed renewability of your individual policy as long as you keep paying the premiums on time (although the cost will surely rise.) If you change your mind down the road, you may not be able to obtain the coverage you want.
Most importantly, do not let coverage lapse. Your options become very limited if you ever let coverage lapse.
I hope we are fortunate enough to enjoy excellent health and that the insurance company makes a fortune off of us as a consequence.