3 Health Insurance Options if You Retire Early

Medicare eligibility kicks in at 65, which is great, but what if you retire early? The priority should be finding health insurance options to fill the gap. And you have several choices to give you adequate coverage. Explore them below and have protection no matter what happens.

1. Group employee health insurance

Most companies offer group employee health insurance to current employees, but those who retire lose this coverage. However, there are a few large firms that may continue subsidizing, at least some of the cost, by contributing toward Medicare premiums and deductibles for retired employees.

You can also ask if your employer has a formal phased-retirement plan, which allows workers to cut back their hours or switch to less demanding jobs while typically still keeping benefits including health insurance.

Another alternative is to switch to an employed spouse’s health insurance plan. If this is available to you, note that you can delay signing up for Medicare Part B. Medicare Part A is free but Part B requires a monthly premium.

2. ACA exchanges

The Affordable Care Act or ACA made health insurance more accessible to retirees. In the past, the insurance premiums faced by retirees are shocking, if they could get coverage at all. Now you can go to HealthCare.gov to look for a policy or your state’s insurance marketplace for affordable insurance.

You do not have to wait for the open enrolment to get a policy because early retirement or retirement is a qualifying life event, which allows you to take advantage of a special enrolment period.


Your coverage can be extended for 18 months under the Consolidated Omnibus Budget Reconciliation Act or COBRA if you have health insurance from work and is about to lose it at retirement. Just note that COBRA coverage is expensive. Without the subsidy from your employer, you have to pay 100% premium plus 2% administration fee. This can be a shocking amount to pay. It may be better to check out the ACA exchange for affordable health insurance options in your retirement.

Other options for retirees include health sharing plans, moving abroad, or going bare. It is up to you to determine the best coverage at this time, depending on your needs and how much time you have to wait before your Medicare kicks in. The good news is you have reasonable options for health insurance in early retirement. Do your research and get yourself covered today.

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MJ Usner