Health Insurance Before Medicare: Bridging the Gap to 65

Medicare doesn’t start until 65

If you retire early, get laid off, or leave a job with employer coverage before turning 65, Medicare isn’t an option yet — that gap has to be covered another way, whether it’s five years or five months. This is one of the most common situations people underestimate when planning an early retirement.

Your main options

A private or Marketplace plan is usually the most flexible option — full ACA-compliant coverage, no medical underwriting, and possible subsidy eligibility depending on your retirement income. Since income (not just assets) determines subsidy eligibility, many early retirees qualify for meaningful savings even with substantial retirement savings, because their reportable income is lower than it was while working.

COBRA lets you keep your former employer’s plan temporarily, but only for a limited window and typically at the full premium cost — often the most expensive way to bridge the gap.

A spouse’s employer plan is worth checking if your spouse is still working and their plan allows a special enrollment addition.

The subsidy question matters more than people think

Retirement often changes your taxable income significantly, which can shift what you’d actually pay for a Marketplace plan. Rather than assuming a private plan will be expensive, it’s worth running the numbers based on your actual expected retirement income before defaulting to COBRA or going without coverage.

Plan for the transition, not just the gap

It’s also worth thinking ahead to how your pre-65 plan transitions into Medicare, including whether you’ll want a Medicare Supplement or Advantage plan once you’re eligible — getting the years leading up to 65 right makes that switch simpler.

Planning an early retirement or already between coverage? Get a free quote and Eli will compare private plan options and estimate subsidy eligibility based on your actual retirement income.