Retiring before the age of 65 means you won’t yet qualify for Medicare, but you’ll still need health insurance coverage. Fortunately, there are several options available to bridge the gap until Medicare kicks in.
Health Insurance Options Before Medicare Eligibility
📌 Employer-Sponsored COBRA Coverage
- If you’re leaving a job with employer-sponsored health insurance, COBRA allows you to continue your existing coverage for up to 18–36 months
- Keep in mind that COBRA is often expensive because you’ll pay the full premium, including the portion your employer previously covered.
📌 Affordable Care Act (ACA) Marketplace Plans
- The ACA Marketplace offers a variety of health insurance plans that provide comprehensive coverage.
- You may qualify for subsidies based on your income, making these plans more affordable.
- Open enrollment occurs annually, but certain life events (such as retirement) qualify you for a special enrollment period.
📌 Spouse’s Employer Health Insurance
- If your spouse is still working and has employer-sponsored health insurance, you may be eligible to join their plan.
- This option can often be more affordable than purchasing individual coverage.
📌 Short-Term Health Insurance
- Short-term health plans can provide temporary coverage but typically don’t cover pre-existing conditions.
- These plans are best for those who are generally healthy and need minimal coverage.
📌 Health Savings Account (HSA) Funds
- If you’ve contributed to an HSA while working, you can use these funds tax-free to pay for medical expenses before Medicare starts.
- HSAs can help cover costs like doctor visits, prescriptions, and deductibles.
📌 Medicaid (If Eligible)
- If your income is low after retirement, you may qualify for Medicaid, which provides comprehensive health coverage at little to no cost.
- Eligibility is based on state-specific income guidelines.
How to Choose the Best Option
- Consider Your Budget: COBRA can be expensive, while ACA plans offer subsidies based on income.
- Review Coverage Needs: If you have ongoing medical conditions, an ACA or employer-sponsored plan may be best.
- Check Enrollment Periods: Be aware of special enrollment deadlines for COBRA, ACA, and employer plans.
- Plan for Medicare Enrollment: At age 65, be sure to enroll in Medicare during your Initial Enrollment Period (IEP) to avoid penalties.
Final Thoughts
Retiring before 65 requires careful planning to ensure you have the right health coverage until Medicare eligibility. Exploring options like COBRA, ACA plans, and spousal coverage can help you stay insured and avoid unexpected medical expenses.
📢 Need Help Finding the Right Pre-Medicare Health Insurance? Contact a licensed health insurance advisor to explore your best options!
