When I left the world of full time employment about a year ago, healthcare was a major worry. Years away from Medicare eligibility—and with a family to insure—I needed a health safety net.

Fortunately, my wife was able to shift us to her employer’s insurance plan. (Aside from health insurance, my marital good fortunes are many—but that’s a column for another day.)

The years from age 50 to 65 can be hazardous to your healthcare. But the risks that come with leaving a job with benefits are just part of the bigger picture of fraying retirement healthcare security.

Last month, the U.S. Equal Employment Opportunity Commission (EEOC) ruled that employers can reduce health coverage they provide for Medicare-eligible retirees without incurring the risk of age discrimination charges.

It’s not disastrous news for post-65 retirees, since most employers coordinate the coverage they provide with Medicare. Some retirees may face higher costs if employers eliminate supplemental benefits such as prescription drug coverage. And some supporters of the ruling think it will give employers needed flexibility to maintain higher health benefits for early retirees—those who haven’t yet hit 65 and need more coverage.

But AARP attacked the ruling as a “civil rights and economic fiasco,” and petitioned the U.S. Supreme Court to review whether the EEOC has the authority to issue the regulation.

No matter where this controversy ends, it’s one more sign of the pressure the U.S healthcare system faces from skyrocketing costs, and the risk to individuals as employers try to shift the burden.

Many employers seem to have concluded they can no longer afford to offer insurance to retirees. In the past two years, big companies like General Motors, Ford, Chrysler, Nissan, Verizon and Sears all have announced cutbacks in health benefits for retirees.

“We should all be very worried about the availability of retiree health benefits,” says Richard Johnson, principal researcher at the Urban Institute in Washington, D.C. “It’s not this ruling per se, but the fact that employers are dropping coverage for retirees older than 65 and the pre-65 population. There’s a growing reluctance to provide lifetime benefits, because employers just don’t know what costs will look like 30 years from now.”

Healthcare expenditures in the U.S. rose 6.8 percent in 2006, and now accounts for at least of 16 percent of gross domestic product.

And government-funded insurance plans are groaning under the weight of soaring healthcare expenditures. The federal insurance trust that funds Medicare is on track to go broke in 2017, according to Johnson. “The condition of Medicare is frightening,” he says. “It’s much worse than the problems we face with Social Security.”

Early retirees, who aren’t eligible for Medicare, are most at risk. According to Mercer, the human resources consulting company, the percentage of large companies offering health benefits to early retirees fell from 46 percent in 1993 to 29 percent in 2001—and then leveled off through 2005.

The industries shedding coverage the quickest rate? Manufacturing, retailing and–are you ready?—healthcare. Click here to see a ranking by Mercer of the industries providing benefits to retirees.

What can early retirees do to manage the health insurance gap? “If you can, keep working to age 65,” advises Johnson. Another option: hang on to the job until you’re 63.5 years old, and then sign up for coverage from your former employer under federal COBRA laws, which will cover you for 18 months—when you turn 65. “You’re responsible for the entire premium but you get your employer’s group rate,” says Derek Guyton, a worldwide partner at Mercer.

The most expensive non-retiree option is to buy private non-group coverage—but there’s a major risk of rejection for pre-existing conditions, and median monthly premiums of $250 per month are three times the rate of typical corporate group plan.

If you’re already 65, the EEOC ruling—if it sticks—could mean the loss of supplemental insurance—prescription drug coverage, for instance. If that happens, you may want to replace the lost coverage with a private Medicare Part D plan.

If none of those solutions work for you—try my marital insurance solution—or pray for federal health care reform.

Tags | health care, health insurance, Medicare