Dear Savvy Senior: Can you help me locate affordable health insurance? I will be retiring soon and need to find some health coverage to last me until I'm eligible for Medicare at age 65. Any ideas?

-- Insurance Shopping Cindy

Dear Cindy: For those who don't have health insurance -- because of early retirement, layoff, divorce or a pre-existing medical condition -- options are available.

Here are some different avenues to look into:



COBRA

Depending upon how long you need coverage, one possible option is to purchase a policy under COBRA (Consolidated Omnibus Budget Reconciliation Act), a federal law that allows you continued coverage under your former employer's insurance for up to 18 months. (Spouses, divorced spouses, widows, widowers and dependent children can be covered for up to 36 months).

To be eligible for COBRA, your company must employ at least 20 workers. Also be aware this isn't the cheapest of options. With COBRA you pay the entire premium yourself, plus 2 percent in administrative costs -- which means a big price hike if your employer was subsidizing your premiums.

To learn more, contact the U.S. Department of Labor's Employee Benefits Security Administration at (866) 444-3272 or visit www.dol.gov/ebsa.

Note that many states require smaller companies (fewer than 20 employees) to offer some type of continuation of coverage to employees. For a database of health care coverage options by state, visit www.nahu.org/consumer/healthcare.



Individual policies

Buying an individual health insurance policy is another option to consider, but keep in mind you must buy a policy sold in your home state.

In the vast majority of states, health insurance costs are based on the applicant's health history and can be very expensive. Any pre-existing condition such as heart disease, diabetes, cancer, etc., can drastically increase your premiums or can nix your chances of being accepted at all.

Some states, however, require individual health insurers to offer everyone a plan, a mandate known as "guaranteed issue." To compare policies, visit www.ehealthinsurance.com or call (800) 977-8860.

If you need some additional help, contact a licensed independent insurance agent in your state at www.nahu.org/consumer/findagent.cfm.



Health savings accounts

If you're relatively healthy and don't spend a lot on medical care, a more affordable option is a health savings account (HSA).

How it works is you purchase a high-deductible (low-premium) health insurance policy with a deductible of at least $1,050 for an individual or $2,100 for a family. Then you open a HSA, which is a tax-sheltered savings account (similar to an IRA) that you can withdraw from, anytime, tax-free to pay for medical expenses that aren't covered by your high deductible health plan.

And, whatever money you don't use rolls over from year-to-year, providing you with a stash of cash for your later retirement years. Each year you can fund your HSA with tax-deductible contributions, which in 2006 can be up to the amount of the deductible, but not more than $2,700 for individuals or $5,450 for families. If you're 55 and older, you can make an additional contribution of $700. To find a HSA plan, visit www.hsainsider.com.



Short-term policies

If you're in need of temporary health coverage (one to 12 months) a short-term health insurance policy is another low-cost option to look into -- if you're healthy with no preexisting medical conditions. To get quotes and coverage details visit www.ehealthinsurance.com or call (800) 977-8860.

Savvy tip: If you're denied coverage because of a serious pre-existing medical condition, you may still be able to get coverage from a state assigned risk pool.

Thirty-three states currently provide high-risk pool coverage which you can apply for through an insurance agent or directly to the state. Coverage costs more than private coverage because all the people in the pool have serious medical problems, but rates are capped generally between 125 and 200 percent of the average individual market premium.

For more information on insurance for those who can't get individual coverage or to find out what your state offers, visit www.nahu.org/consumer/healthcare.

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit www.savvysenior.org. Jim Miller is a regular contributor to NBC's Today Show and author of "The Savvy Senior" book.