Retiring Before 65: Health Insurance Options Until You Qualify for Medicare

If you plan to stop working before you turn 65, health insurance is one of the biggest questions to settle. Medicare generally starts at 65, which may leave a gap of several years. This guide walks through the common options, the timing rules, and how to compare them.

The Gap Between Work and Medicare

Many people get health insurance through an employer. When that coverage ends, you need a replacement until you become eligible for Medicare. Premiums, deductibles, and networks all affect the real cost, so it is worth comparing options before your last day of work, not after.

Option 1: COBRA Continuation Coverage

COBRA lets many people keep their employer plan for a limited time after leaving a job, typically up to 18 months. You usually pay the full premium plus an administrative fee, since the employer no longer contributes. COBRA keeps your current doctors and network, but it is often expensive.

Option 2: A Spouse's or Partner's Employer Plan

If your spouse is still working and has coverage, you may be able to join their plan. Losing your coverage typically opens a window to enroll. Compare their premium and deductible with other options.

Option 3: ACA Marketplace Coverage

Marketplace plans are available to people who are not yet eligible for Medicare. Losing job-based coverage typically opens a Special Enrollment Period, generally with a 60-day window to choose a plan, and you may be able to apply before the coverage ends. Voluntarily leaving COBRA outside Open Enrollment usually does not qualify, so decide carefully. Our guide to premium tax credits explains how financial help may apply.

What Can Make Marketplace Plans Cost More at This Age

ACA rules limit how much more insurers can charge older adults compared with younger adults, with a federal limit of three to one. Even so, premiums generally rise with age, which is why financial help and comparing metal tiers matter. See our guide on how ACA costs work.

Retiree Coverage From a Former Employer

Some employers offer retiree health benefits. They are less common than they once were, and the terms vary. Ask your benefits office before you leave.

Planning for Medicare at 65

Your Initial Enrollment Period for Medicare generally begins three months before the month you turn 65 and lasts seven months in total. Missing it can lead to delays in coverage and, in some cases, higher premiums for life. If you are on a Marketplace plan when you become Medicare-eligible, you generally need to enroll in Medicare and end the Marketplace plan, since you cannot receive premium tax credits for months when you are eligible for premium-free Medicare Part A. Medicare.gov has the details.

A Timeline to Work Through

1. 6 to 12 months before retiring: price COBRA, a spouse's plan, and Marketplace options.
2. Before your last day: note the date your coverage ends, and whether a Special Enrollment Period opens.
3. Within 60 days of losing coverage: choose a plan.
4. Three months before 65: start planning for Medicare.

Sources and Further Reading

• HealthCare.gov: Coverage when you are unemployed or between jobs
• U.S. Department of Labor: COBRA continuation coverage
• Medicare.gov: When does Medicare coverage start?