Health Insurance Options for Early Retirement: Bridging the Gap Before Medicare
Retiring Before 65? You’re Not Alone
Many people want to retire before becoming Medicare-eligible at 65—but the biggest obstacle is often health insurance. In this episode, Cole and James break down how to retire early without sacrificing your healthcare coverage. With some planning, it’s not only possible—it can be empowering. Cole even shared the story of his in-laws, who wrestled with this decision in their late 50s. It’s a common concern, but one that can be addressed with the right knowledge and preparation.
Who Are Early Retirees?
Cole defines early retirement as those aged 55 to 64—a group that includes over 40 million Americans. For this demographic, health insurance is one of the top three concerns, along with: running out of money, rising healthcare costs, and navigating Medicare transitions.
5 Health Insurance Options for Early Retirees
Here are the main coverage paths to consider before you qualify for Medicare:
- ACA Marketplace Plans (Affordable Care Act) – Guaranteed issue (no denial for preexisting conditions), eligible for Advanced Premium Tax Credits (APTC), and offers a wide variety of plan choices with federal subsidies.
- Short-Term Major Medical – Cheaper upfront cost but lacks prescription/preventative care, requires medical underwriting, and best for very healthy individuals.
- Retiree Health Coverage Benefits – Offered by some employers, though less common and may not match active employee benefits.
- Health Care Sharing Programs – Faith-based and low-cost, but not technically insurance and lacks legal protections.
- COBRA Coverage – Continue your employer’s coverage for up to 18 months. Very expensive, but may be worth it if you’ve met your deductible or out-of-pocket max.
Bonus Tip: Spousal benefits can provide a simple alternative—stay on your partner’s employer plan, if available.
How to Maximize APTC (Advanced Premium Tax Credits)
These subsidies are paid directly to your insurance provider to reduce your monthly premium. Thanks to the American Rescue Plan Act, APTC now operates on a sliding scale—no more income cliffs. Strategy Tip: Keep your income within the APTC range, but avoid going below the federal poverty level, or you may end up in Medicaid with added asset reviews. Note: These expanded tax credits are set to expire at the end of 2025, but may be extended by future legislation.
Three Ways to Enroll in Coverage
- Do-It-Yourself (DIY) – Requires time, research, and understanding of contracts. Risk of missing better options.
- Direct Enrollment with a Carrier – Limits your options to just that provider’s plans.
- Work with a Broker (like Move Health Partners) – Offers a full-market view, helps find the most affordable and appropriate plan, and provides a transparent process with expert guidance.
When to Start Planning
Start 6 months before retirement to compare plans, manage income, and align your coverage
Ideally begin 2 years in advance to maximize your APTC opportunities
Follow up 1 month before retirement to finalize and enroll
Don’t Forget Medicare at 65
Failing to enroll in Medicare on time can lead to late penalties and coverage gaps. Many insurers will drop individual health plans once you become eligible. Be proactive. Transition on time.
Final Thoughts: Be an Empowered Consumer
Cole wrapped the discussion with this reminder: Don’t rely on anecdotal advice. Every retiree’s needs are different. Do your research or consult professionals who understand the system. At Move Health Partners, education comes first. Their mission is to help you find the right plan, not just sell you a product. Early retirement is achievable—with the right health insurance strategy in place.
You should always consult a financial, tax, or legal professional familiar about your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns.
Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost.
