How will you get health insurance in retirement?

For many workers, leaving full-time employment means leaving employer-provided health insurance behind as well. In 2015, only 23 percent of employers with 200 or more employees offer any form of health insurance for their retirees. No wonder the main reason people give for working well beyond typical retirement age is the need to stay on their employer's health insurance plan.

Factoring in health care expenses is a critical part of retirement planning. A 65-year-old couple retiring in 2015 is projected to need savings of approximately $245,000 to cover their health care insurance and out-of-pocket costs in retirement. The first thing to do is to learn about what your options are for health insurance, where you get it, what it costs and what it does and doesn't cover.

Most retirees get their health coverage through Medicare, the government health insurance program for people age 65 and older. Medicare covers more than 62 percent of medical expenses for people in this group compared to only 16 percent that private insurance covers. Most people are automatically covered at age 65 under Medicare's hospital insurance component, called Medicare Part A. This coverage comes at no cost as long as you or your spouse paid Medicare taxes during your working years.

Medical insurance that covers the services of your doctor, outpatient hospital care, physical and occupational therapy, and even some home health care is called Medicare Part B.

But Medicare Part B isn't free. Monthly premiums can range from about $105 to as much as $336 (for singles earning over $214,000 and marrieds earning over $428,000). These monthly premiums can be as much as 52 percent higher for some 7 million people who are newly enrolled in Medicare in 2016 or have higher incomes.

Medicare includes significant cost limits for what it will pay, so expect to fork over significant out-of-pocket costs when this is your only health insurance. Because these costs can be a significant financial burden, many people also purchase a supplemental, or Medigap, policy. This is an additional policy that fills in the coverage gaps. Medigap policies may offer more choices for where you can get your medical care, but you may pay a higher premium for this. You'll also have to manage several policies and ID cards.

Another option to consider is a Medicare Advantage or Managed Care Plan. This is also referred to as Medicare Part C, which is an all-in-one plan that combines Medicare Part A and B in a single policy. These policies, which replace your Medicare plan, often come with additional prescription drug coverage as well.

Visit the Medicare website for help in finding and comparing costs for coverage that best suits your needs. Also, check out plans available at groups like AARP, which may provide lower costs and additional benefits.

  • Ray Martin

    View all articles by Ray Martin on CBS MoneyWatch»
    Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.