Early Retirement Coverage
How Do You Get Health Insurance If You Retire Before 65?
If you retire before Medicare starts at 65, you have four main ways to bridge the gap: keep your employer plan through COBRA for up to 18 months, buy an ACA plan on or off the exchange, join a health sharing program, or get on a spouse's plan. For many early retirees the smartest move is managing how much taxable income they realize each year, because premium help is based on income, not assets.
Key takeaways
- • Medicare starts at 65, so retiring at 55 to 62 means bridging 3 to 10 years of coverage on your own.
- • COBRA keeps your exact plan and doctors but is expensive and time-limited.
- • Because subsidies look at income (MAGI) and not net worth, asset-rich early retirees who control their taxable income can sometimes qualify for real premium help even in 2026.
- • The subsidy cliff returned in 2026, so income planning matters more than ever.
What are your coverage options between retirement and Medicare?
COBRA
Keeps your current plan, network, and deductible progress. You pay the full premium (employer share included) plus up to 2%. Available for up to 18 months. Best as a short bridge or when a major treatment is already in progress.
ACA plan on or off exchange
The widest plan choice for pre-65 coverage. You may qualify for a premium tax credit depending on your projected MAGI. Off-exchange sometimes gives you access to plans and networks the marketplace does not show.
Health sharing
Lower monthly cost and a workable option for healthy retirees comfortable with the trade-offs. Not insurance and not guaranteed. Pre-existing conditions are usually limited.
Spouse's employer plan
Often the cheapest option if it is available. Retiring triggers a special enrollment period for their plan.
Part-time work with benefits
Some employers extend coverage to part-time workers. A day or two a week can be enough to keep group coverage in place until 65.
Why income planning is the early retiree's secret weapon
ACA subsidies are based on MAGI. Early retirees living off savings, brokerage accounts, and Roth funds often have unusual control over their taxable income. By choosing which accounts to draw from and when to realize capital gains, some can keep MAGI low enough to qualify for a premium tax credit even with a substantial net worth.
With the 400% of poverty cliff back in 2026 (roughly $63,000 for a single person, about $128,000 for a family of four), staying under the line can be worth thousands per year. A 60-year-old couple just over the line at about 402% of poverty can face roughly $22,600 per year in premiums (Bipartisan Policy Center, 2026).
This is general information, not tax advice. We are licensed insurance brokers, not tax advisors. Coordinate any MAGI planning move with your CPA and financial advisor.
How much does bridge coverage cost?
The 2026 average benchmark silver premium is about $625 per month per person (Peterson-KFF, 2026), and pre-65 premiums run higher because rates rise sharply with age. COBRA is typically your full former premium (employer share included) plus up to 2%, which is why it is often the most expensive of the four options.
Early retirement coverage options compared
| Option | Typical monthly cost | Keeps your current doctors | Time limit | Best for |
|---|---|---|---|---|
| COBRA | $700 to $2,500+ per person | Yes (same plan) | Up to 18 months | Short bridge or ongoing treatment |
| ACA plan (on/off exchange) | $400 to $1,800+ per adult (before any credit) | Depends on network | None | Most early retirees, especially those who can manage MAGI |
| Health sharing | $200 to $500 | Depends on program | None | Healthy retirees comfortable with limits |
| Spouse's employer plan | $150 to $700 | Depends on network | Ends if spouse leaves job | Retirees whose spouse still works |
How to choose coverage between early retirement and Medicare
- Assess how many years to bridge. Count the years until you turn 65. This drives whether COBRA can carry you through or you need a longer-term plan.
- Compare COBRA, ACA, and health sharing. Get real quotes for each. Weigh doctor network, monthly cost, and how comfortable you are with sharing programs.
- Project your taxable income. Estimate MAGI for each year. Coordinate withdrawals from brokerage, IRA, and Roth accounts to control the number.
- Enroll during your special enrollment window. Losing job-based coverage opens a 60-day window. Retiring during open enrollment is also fine.
- Plan the switch to Medicare at 65. Enroll in Part A and Part B during your Initial Enrollment Period, then choose Medicare Supplement plus Part D or a Medicare Advantage plan.
Related reading
Frequently asked questions
When does Medicare start?
Age 65 for most people. Younger people can qualify through Social Security Disability Insurance after a 24-month waiting period or with certain diagnoses like ESRD and ALS, but the standard eligibility age is 65.
How long does COBRA last?
Usually up to 18 months after you leave the job. Certain qualifying events, like disability, can extend it. COBRA keeps your exact plan and network, but you pay the full premium plus up to 2% administrative fee.
Can a wealthy early retiree get an ACA subsidy?
Possibly, because eligibility is based on Modified Adjusted Gross Income (MAGI), not assets or net worth. Early retirees who choose to draw from tax-advantaged and after-tax accounts strategically can sometimes keep taxable income under the 400% of poverty cliff and qualify for a premium tax credit.
What happens to my coverage at 65?
You transition to Medicare. We help plan that transition so there is no gap and so you avoid late enrollment penalties for Part B and Part D. It is worth mapping out 6 to 12 months in advance.
Is health sharing a good fit for early retirees?
It can be for healthy retirees who understand it is not insurance and that pre-existing conditions are usually limited. For retirees with existing conditions, chronic medications, or a preference for guaranteed coverage, an ACA plan is usually the safer path.
Book a free consultation
Retirement is a high-touch decision. Let's map your bridge to Medicare together, including plan selection, income planning coordination, and enrollment timing.