Can I get health insurance if I retire before 65?

Yes. Losing your employer coverage when you retire is a qualifying life event, which opens a 60-day special enrollment period on the ACA marketplace. That window is available year-round, so you can retire in any month and enroll in a marketplace plan without waiting for Open Enrollment. COBRA, a spouse's employer plan, and employer retiree benefits (if offered) are the other main routes.

How much does health insurance cost between retirement and Medicare?

It depends heavily on your income, not your savings. Ages 60 to 64 sit in the highest premium age band, so full sticker prices are steep. But marketplace premium subsidies are based on your modified adjusted gross income (MAGI) for the year, not your assets. A retiree with a large 401k who keeps withdrawals modest can qualify for substantial subsidies that bring the premium down dramatically.

Do my 401k and savings count against marketplace subsidies?

No. Subsidy eligibility is based on income (MAGI), not assets. Money sitting in a 401k, IRA, brokerage account, or bank account does not count. What counts is income you realize during the year: traditional 401k or IRA withdrawals, Roth conversions, capital gains, interest, dividends, pensions, and similar items. Qualified Roth withdrawals and spending down cash do not add to MAGI.

Is COBRA or a marketplace plan better when I retire?

COBRA lets you keep your exact employer plan for up to 18 months, but you pay the full premium plus up to a 2% administrative fee, with no subsidy to offset it. A marketplace plan is usually cheaper for early retirees because premium tax credits are based on income, and most retirees can manage their income. COBRA tends to win only when you are mid-treatment, have met a large deductible, or need a specific network for a short stretch.

What is the subsidy cliff and why does it matter for early retirees?

The enhanced premium tax credits expired at the end of 2025, which restored the income cap: if your MAGI goes over 400% of the federal poverty level, you get no premium tax credit at all. One dollar over the line can cost thousands in lost subsidy. Early retirees are especially exposed because Roth conversions, lump-sum withdrawals, and large capital gains can push a single year's income over the cliff.

Will a Roth conversion ruin my marketplace subsidy?

It can, for the year you do it. A Roth conversion counts as ordinary income in the year of the conversion, which raises your MAGI and can shrink or eliminate that year's subsidy. Many early retirees schedule large conversions for years before retirement or after 65, when marketplace subsidies no longer matter. Confirm the timing with a tax professional before you convert.

Do I have to wait for Open Enrollment to retire?

No. Losing employer coverage triggers a special enrollment period, so you can enroll within 60 days of losing coverage at any time of year. Open Enrollment (November 1, 2026 to January 15, 2027 for 2027 coverage) matters mainly as your annual chance to switch plans or re-shop after your first bridge year.

Can I use an HSA while bridging to Medicare?

Yes, if you enroll in an HSA-eligible plan. As of 2026, Bronze and Catastrophic marketplace plans are HSA-eligible, which widened the options considerably. HSA contributions also lower your MAGI, which can help you qualify for a larger subsidy. Note that HSA contributions must stop once you enroll in Medicare.

Retiring Before 65? How to Bridge Health Insurance Until Medicare

Quick Answer: Bridging the Gap to Medicare

Retiring before 65 means covering yourself until Medicare begins. For most early retirees, an ACA marketplace plan is the best value, because premium subsidies are based on your income (MAGI), not your assets. Losing employer coverage is a qualifying life event with a 60-day special enrollment period, available year-round, so you can retire in any month. The big traps: keeping your MAGI under 400% of the federal poverty level (go over and the premium tax credit disappears entirely), and one-time income spikes like Roth conversions or lump-sum withdrawals that can wipe out a year's subsidy. Plan your income before you plan your retirement party.

The Problem: Medicare Starts at 65, Your Retirement Might Not

Medicare eligibility begins at 65 for almost everyone. Retire at 62 and you have three years to cover. Retire at 58 and you have seven. Those bridge years land in the most expensive age band in the individual market: premiums for people 60 to 64 are the highest of any age group, because insurers are allowed to charge older enrollees up to three times what they charge younger ones.

That is the bad news. The good news is that the price you actually pay can look nothing like the sticker price, because the ACA's premium subsidies are keyed to income rather than wealth. The retirees who do this well treat the bridge years as an income-planning exercise, not just a shopping trip. The retirees who do it badly pay full freight or, worse, trigger a surprise subsidy clawback at tax time.

Your Five Bridge Options, Compared Honestly

There are five realistic ways to stay covered between your last day of work and your 65th birthday. Most early retirees end up using one of the first two, and some stack them (COBRA for a few months, then a marketplace plan).

1. An ACA Marketplace Plan

You buy coverage on HealthCare.gov or your state exchange, and the government chips in via the premium tax credit if your income qualifies. Pros: subsidies are based on income, not assets; you cannot be denied or charged more for health conditions; plans cover the full set of essential health benefits; you can enroll any time of year after losing employer coverage. Cons: networks are often narrower than employer plans, you may need to change doctors, and the subsidy math requires genuine attention (more on that below).

2. COBRA

COBRA lets you keep your employer plan for up to 18 months after leaving. Pros: identical coverage, same network, same doctors, and your deductible progress for the year carries over. Cons: you pay the entire premium yourself (the share your employer used to cover plus your share) plus up to a 2% administrative fee, and there is no subsidy of any kind. For a couple in their early 60s, that routinely means a four-figure monthly bill. And 18 months rarely covers the whole bridge. COBRA makes the most sense when someone in the household is mid-treatment or has already met a large deductible. For the full comparison, see our guide to COBRA vs. marketplace insurance.

3. A Spouse's Employer Plan

If your spouse keeps working with benefits, losing your own coverage lets you join their plan through a special enrollment, usually within 30 days of your coverage ending. Pros: often the cheapest option thanks to the employer's premium contribution, with a familiar employer-style network. Cons: it only works as long as the spouse keeps the job, and it ties their retirement date to your coverage.

4. Employer Retiree Health Benefits

Some employers, mostly governments, universities, and a shrinking set of large companies, still offer retiree medical coverage before 65. Pros: if you have it, it is often well priced and familiar. Cons: most workers do not have access to it, employers can change or end the benefit, and the premiums are sometimes high enough that a subsidized marketplace plan beats it anyway. Ask HR for the exact retiree rates before assuming it is your best deal.

5. Part-Time Work With Benefits

A handful of national employers offer medical benefits to part-time employees. Pros: employer-subsidized coverage plus some income, which can be a comfortable glide path. Cons: you are working in retirement, benefits eligibility rules have hour minimums, and the wages add to your income, which matters if you later switch to a subsidized marketplace plan.

Why the Marketplace Is Usually the Front-Runner

Here is the fact that surprises affluent early retirees the most: marketplace subsidies are asset-blind. The premium tax credit looks at one number, your modified adjusted gross income (MAGI) for the year. It does not look at your 401k balance, your IRA, your brokerage account, your home equity, or your savings.

That means a 62-year-old couple with a seven-figure retirement portfolio who live on modest withdrawals and cash savings can report a MAGI that qualifies them for a substantial subsidy. They are not gaming anything; this is simply how the law defines eligibility. Meanwhile, the same couple paying COBRA would get zero help regardless of income. Because 60 to 64 is the most expensive age band, the subsidy is worth more to you now than it will ever be again, which makes the planning effort worth it.

You can estimate your own numbers in a few minutes with our subsidy calculator, and our guide on how to compare health insurance plans walks through choosing between the plans your subsidy applies to.

Planning an Early Retirement? Price the Bridge First

Our licensed advisors can run your real numbers: your age, your county, and your planned retirement income, and show you what a marketplace plan would actually cost after subsidies, side by side with your COBRA rate. No cost, no obligation.

Get Your Free Quote Talk to an Advisor

The MAGI Game: Income Planning for the Bridge Years

Since the subsidy follows your income, the question becomes: what counts as income, and what can you control? MAGI generally includes traditional 401k and IRA withdrawals, Roth conversions, pensions, capital gains, interest, dividends, and most Social Security. It generally does not include qualified Roth withdrawals, spending down cash savings, or selling investments at their cost basis (only the gain counts).

That gives early retirees several levers. Treat the list below as general education, not tax advice, and confirm your specific plan with a tax professional:

Time Roth conversions around the bridge: conversions count as income in the year taken. Doing them in your final working years, or waiting until after 65 when marketplace subsidies no longer apply to you, keeps them from inflating bridge-year MAGI.
Draw from cash and basis first: living on savings, qualified Roth money, and the cost-basis portion of taxable investments produces little or no MAGI, leaving room for the withdrawals you do need.
Use an HSA to lower MAGI: contributions to a health savings account reduce MAGI dollar for dollar. As of 2026, Bronze and Catastrophic plans are HSA-eligible, so pairing a lower-premium plan with HSA contributions can improve both your taxes and your subsidy. See our HSA rules for 2026 guide.
Smooth out lump sums: a one-time event (selling a property, a large capital gain, a big 401k withdrawal for a purchase) lands entirely in one year's MAGI. If it can be split across years or timed before retirement, the subsidy damage is contained.

The subsidy cliff is back, and it is unforgiving

The enhanced premium tax credits expired at the end of 2025, which restored the hard income cap: if your MAGI exceeds 400% of the federal poverty level, you receive no premium tax credit at all. Not a reduced one. None. One dollar over the line can cost a 60-something couple thousands of dollars in lost subsidy for the year. It gets worse: the caps that once limited how much excess subsidy you had to repay are gone in 2026, so if you underestimate your income and take a bigger advance credit than you earned, you can owe the entire overage back at tax time. Estimate conservatively, update the marketplace when your income changes, and read our full guide to the subsidy cliff over 400% FPL before you finalize your withdrawal plan.

Timing Your Retirement Date vs. Enrollment Windows

Good news first: you do not need to time your retirement around Open Enrollment. Losing employer coverage is a qualifying life event, and it opens a 60-day special enrollment period on the marketplace. That window exists year-round. Retire in April, enroll in April or May, and your coverage can begin without waiting for November.

A few timing details still matter:

Avoid a gap: apply before your employer coverage ends if you can. In most cases a marketplace plan can start the first of the month after your old coverage ends, so a coverage end date at month-end makes for the cleanest handoff.
The 60-day clock is real: miss it and you may be stuck waiting for Open Enrollment, with COBRA as the expensive fallback.
Open Enrollment is your annual reset: for 2027 coverage it runs November 1, 2026 to January 15, 2027, and you need to enroll by December 15 for a January 1 start. Even if you enrolled mid-year through a special enrollment period, re-shop every fall: plans, prices, and networks change annually. Our Open Enrollment 2027 guide covers the details.
A partial-year wrinkle in your retirement year: your MAGI for subsidy purposes is the full calendar year's income, including the salary you earned before retiring. Retiring late in the year often means a high-MAGI year with little or no subsidy for those first months, with the full subsidy arriving the first complete calendar year of retirement.

Your Pre-Retirement Coverage Checklist

Count the bridge months between your planned retirement date and your 65th birthday.
Estimate your retirement-year and first-full-year MAGI, and check where each lands relative to 400% of the federal poverty level for your household size.
Get your exact COBRA rate from HR and your marketplace price after subsidies, then compare them for the same months.
Check marketplace plan networks for your doctors and formularies for your prescriptions before you commit.
Review planned Roth conversions, asset sales, and lump-sum withdrawals with a tax professional, and move any that would spike bridge-year MAGI.
Mark your 60-day special enrollment window on the calendar for the day your employer coverage ends.

The Bottom Line

The gap between early retirement and Medicare is a planning problem, not a dealbreaker. For most people the marketplace wins on price because subsidies follow income rather than assets, and a special enrollment period means you can retire on your own schedule. The real work happens before you give notice: map your bridge-year income, respect the 400% cliff, time the big one-off income events, and compare your COBRA rate against the subsidized marketplace price with real numbers. Do that, and health insurance stops being the reason to work three more years.