What Your Insurance Won't Cover: Essential Healthcare Gaps Every Washington State Public Employee Should Know Before Retiring

Picture this: You're 57, eligible to retire from your state job with 30 years of service, but you won't be eligible for Medicare for another eight years. You assume your PEBB retiree coverage will handle everything until then. Then you discover that without employer contributions, your health insurance premiums jump from $200 to $850 monthly, routine dental cleanings cost $150 out of pocket, and if you need long-term care, Medicare won't help at all until you turn 65—and even then, coverage is extremely limited.¹
For state and local government employees in Washington, understanding what your insurance won't cover is crucial whether you're retiring before or after 65. The gaps in coverage create different challenges at different ages, and can create unexpected expenses that derail even the best retirement plans.
Core Principles
Understanding healthcare coverage gaps requires grasping these key principles that change dramatically at age 65:
1. Before 65: You Pay Full Freight for PEBB Coverage As a retiree under 65, you'll pay the full premium for PEBB coverage without employer contributions. This can mean monthly premiums of $850-1,200 compared to the $200-400 you paid as an active employee.²
2. After 65: Medicare Has Major Coverage Holes Traditional Medicare Parts A and B exclude routine dental, vision, and hearing care entirely.³ Your PEBB coverage becomes secondary, but significant gaps remain.
3. Long-Term Care Coverage Is Almost Nonexistent at Any Age Before 65, PEBB offers minimal long-term care coverage. After 65, Medicare only covers skilled nursing for up to 100 days after a qualifying hospital stay.⁴ Most long-term care is custodial care, which neither covers.
4. Prescription Drug Coverage Changes at 65 Before 65, you rely on PEBB prescription coverage. After 65, Medicare Part D caps out-of-pocket costs at $2,000 annually starting in 2025, but this only applies to covered medications.⁵
Your 4-Step Strategy for Managing Healthcare Coverage Gaps
Step 1: Understand How Coverage Changes Before and After Age 65
Before Age 65 (Early Retirement): As a public employee retiring before 65, you can continue PEBB coverage, but you'll pay the full premium without employer contributions. Monthly costs jump from roughly $200-400 to $850-1,200 for medical coverage alone.⁶ You're also not eligible for Medicare, so PEBB is your primary coverage with all its limitations.
After Age 65: You must enroll in Medicare Parts A and B to keep your PEBB coverage. Your PEBB plan becomes secondary insurance, helping cover some of Medicare's gaps. However, new limitations appear that didn't exist with your working-age PEBB coverage.
Key action items:

• Contact PEBB at 1-800-200-1004 at least six months before retirement
• Calculate the true cost of PEBB premiums without employer contributions
• Understand Medicare enrollment deadlines if retiring before 65

Step 2: Calculate the Real Cost of Dental, Vision, and Hearing Care by Age
Before Age 65: PEBB retiree plans offer some dental and vision coverage, but with annual maximums typically around $1,000-1,500 for dental. Once you hit these limits, you pay full price. Hearing aids aren't covered at all.
After Age 65: Medicare excludes routine dental, vision, and hearing care entirely. Your PEBB coverage may help, but gaps remain significant. Average annual costs for retirees: $766-$992 for dental care depending on coverage.⁷
Universal Costs Regardless of Age:

• Routine dental cleaning and exam: $150-$300 annually
• Crown replacement: $800-$2,500 each
• Annual eye exam: $100-$200
• Progressive glasses: $300-$600
• Hearing aids: $1,000-$6,000 per pair (lasting 5-7 years)

Step 3: Plan for Long-Term Care Needs at Different Life Stages
Long-term care means you need help with daily activities—bathing, dressing, eating, using the bathroom. Neither PEBB nor Medicare covers much of this, regardless of your age.
The True Costs in Washington:

• Nursing home private room: $120,000+ annually
• Assisted living facility: $60,000+ annually
• In-home care aide: $30+ per hour ($7,200+ monthly for full-time care)

Planning options for any age:

• Long-term care insurance
• Self-insurance through dedicated savings
• Hybrid life insurance with long-term care riders

Step 4: Create Your Age-Specific Coverage Gap Action Plan
For Early Retirees (Before 65): Your biggest challenge is the dramatic increase in premium costs plus coverage gaps. Calculate:

• Full PEBB premium costs: $850-1,200 monthly
• Dental care beyond annual maximums: $______ annually
• Vision care: $______ annually
• Hearing care: $______ annually
• Long-term care planning: $______ (insurance premiums or savings)

For Traditional Retirees (65+): Focus on supplementing Medicare's gaps while leveraging the new prescription drug benefits. Calculate:

• PEBB secondary coverage premiums: $______ monthly
• Dental care gaps: $______ annually
• Vision care gaps: $______ annually
• Hearing care: $______ annually
• Long-term care planning: $______ (insurance premiums or savings)

A typical budget might include $800 for dental, $300 for vision, $200 for hearing needs, and $2,400 for long-term care insurance—but early retirees must also budget an additional $650-800 monthly for increased health insurance premiums.
Alternative Approaches for Different Retirement Ages
For Early Retirees (Before 65):
The Bridge Strategy: Purchase temporary health insurance to bridge the gap to Medicare eligibility, then switch to PEBB plus Medicare at 65. This can save money if you're healthy but carries risk.
For Traditional Retirees (65+):
The Medicare Advantage Route: Choose Medicare Advantage plans that include dental, vision, and hearing benefits instead of traditional Medicare plus PEBB. However, you'll lose PEBB coverage entirely.
For Any Age:
The Self-Insurance Approach: Build a dedicated healthcare fund rather than purchasing additional insurance. Plan to save 15-20% of your retirement income specifically for healthcare costs not covered by your primary insurance.
Action Plan
Take these steps in the next 30 days:

1. Contact PEBB at 1-800-200-1004 to request retirement planning materials specific to your situation
2. Calculate your personal healthcare gap budget using the framework above
3. Research long-term care insurance get quotes from at least three insurers
4. Schedule a Medicare education session through SHIBA (Statewide Health Insurance Benefits Advisors) if you're within 2 years of age 65
5. Review your current HSA contributions and maximize them if eligible—this money can pay for many uncovered healthcare costs tax-free

Remember, every person's situation is unique. While this framework provides essential guidance, consider consulting with a financial advisor who specializes in retirement planning for public employees to create a personalized strategy.
Sources and Resources

1. Washington State Health Care Authority - PEBB Retiree Benefits
2. Washington State Health Care Authority - 2025 PEBB Retiree Premiums
3. Medicare.gov - Dental Service Coverage
4. Medicare.gov - Nursing Home Care Coverage
5. National Council on Aging - Medicare Part D Changes 2025
6. Department of Retirement Systems - Healthcare Resources
   
7. Kaiser Family Foundation - Dental, Hearing, and Vision Costs Among Medicare Beneficiaries

-Seth Deal