Q. My husband will have his 65th birthday this June and he would like to retire within the next year, which means we will no longer have company health care insurance. Although he will be eligible for Medicare, I am only 58.   So we will have to find another source for my insurance needs exactly when we are taking a drastic cut in income.

About two years ago I turned my long term hobby into a business and I now teach classes one or two nights a week through our local parks and recreation department, as an independent contractor. So far, my income is about equal to my business expenses.

I am now wondering if I will have to give up my little business, which I have worked so hard to establish. I can barely stand the idea of having to give it up to go back to work for a company in order to get health insurance.

Searching for insurance hasn't been encouraging: the premium through my husband's professional society is $3,000 a quarter. Do you have any ideas about how to obtain more affordable insurance coverage?

--B.H., by e-mail from Dallas


A. Sorry, there is no magic cure for this problem. The best thing to do is to deal with it one step at a time. First, you will have your husband's insurance while he is still employed. After that you can continue his insurance through COBRA for 36 months. The usual period is 18 months but it is extended to 36 months in cases where the insured spouse signs up for Medicare. The 36-month period also applies to divorce.

It won't be cheap but it will certainly be less than $3,000 a quarter. In theory you can continue with the same insurance company beyond the COBRA period but it involves moving from a group policy to an individual policy. Both coverage and benefits tend to be much reduced.

While you have COBRA you can become one of the millions of people pushing Congress to extend Medicare coverage to people who are younger than 65. When the Clinton Administration proposed such a plan in the late nineties a Harris Poll found the idea was favored by more than half of all respondents. The medical insurance situation hasn't improved since then.

One resource you should learn about is state risk pools. These are insurance pools, offered in many states, that provide access to health insurance for people who cannot otherwise find coverage, often people with pre-existing conditions. You can find a list of states with risk pools and access information at www.seniorcitizens.com/k/riskpool.htm.

The Texas Health Insurance Risk Pool (www.txhealthpool.com) provides such coverage. The monthly premium varies with age, sex, tobacco use, area, and with the size of the deductible chosen. A $2,500 deductible policy, for instance, for a 55 to 59 year old non-smoking woman would have a monthly premium between $370 and $524 statewide, depending on where you lived. It would cost $486 in the Dallas area.

Since these policies cover pre-existing conditions, the cost should represent the highest you might have to pay. Some searching should turn up a lower cost alternative.


Q. I'm in the Air force and a financial services company keeps trying to get me to invest with them. My problem is that 50 percent of the first year's premiums is the load and this happens each time I would increase the allotment. The agent says that over a 15-year period it works out to about 3 percent. Can I do better? They are recommending Fidelity Destiny and Pioneer Independence Plans.

---J.F., Fort Walton Beach, FL


A. Systematic investment plans are the dinosaurs of the mutual fund industry. They offer the benefit of allowing you to make small monthly investments. This comes at the expense of a commission structure that front loads costs for the entire commitment. It can have a really major impact if you change your mind.

The best alternative is to learn about all the alternatives. Remember, there are now 16,000 mutual fund offerings.

The most flexible way to avoid high commissions is to save enough money to make a larger initial purchase for a fund, followed by smaller automatic monthly purchases. Using the Morningstar Principia database I found that 12,505--- 75 percent--- of the 16,000 mutual funds require minimum initial investments of $3,000 or less. Of those, 7,500 allow subsequent automatic purchases of $100 or less.

That's pretty good. But it gets better. Nearly 3,000 have neither a front-end or deferred load.

Here are some good places to look. American Century is well geared for automatic investment plans. So is T. Rowe Price. Also, as a member of the Air Force you may already do business with USAA. Their Balanced Strategy Fund has a minimum investment of $3,000 (only $250 for an IRA).