Medicare starts at 65 — but a lot of people retire earlier. Here's a clear, honest look at how to cover the years in between without overpaying or getting caught out.
The short version: If you retire before 65, you need a plan to bridge to Medicare. The main paths are COBRA (seamless but expensive), the ACA marketplace (your likely base — though subsidies shrank in 2026), a working spouse's plan, part-time work with benefits, or Medicaid. Avoid bare-bones "short-term" plans. We are not insurance agents.
Medicare starts at 65. If you retire — or lose employer coverage — before then, you're responsible for your own health insurance until you qualify. For someone leaving work at 60, that's five years to bridge. Going uninsured isn't a real option at this age: it's exactly when a single hospital stay can wipe out a retirement plan.
The good news is you have several legitimate paths. The hard part is that the most popular one — the ACA marketplace — got noticeably more expensive in 2026. Here's the honest lay of the land.
COBRA lets you stay on your former employer's group health plan after you leave — usually for up to 18 months. The coverage is identical to what you had, which is its big appeal: same doctors, same network, no disruption mid-treatment.
While employed, your company quietly covered most of your premium. On COBRA, you pay the entire premium plus up to a 2% administrative fee. That can mean a bill of $700–$2,000+ a month for a couple — a number that shocks most people. COBRA is best as a short bridge (a few months) or when you're mid-treatment and can't risk changing networks.
The Affordable Care Act marketplace lets anyone buy individual coverage regardless of pre-existing conditions. For early retirees, it has long been the workhorse option — and for many it still is. But 2026 brought a real change worth understanding before you count on it.
The enhanced premium tax credits — the extra subsidies that made marketplace plans far cheaper since 2021 — expired on January 1, 2026. As a result, out-of-pocket premiums rose sharply for many enrollees (KFF estimated an average increase of well over 100%). The pre-2021 "subsidy cliff" also returned: in general, households earning more than 400% of the federal poverty level may get little or no subsidy. Congress has been debating whether to restore the enhanced credits, so this is genuinely in flux — check the current rules before assuming a price.
Even with the change, the marketplace remains the right home base for most early retirees: guaranteed coverage, real benefits, and subsidies are still available to many people under that income threshold. The key is running your own numbers, because your premium depends on your income, age, and ZIP code.
You'll see cheap "short-term medical" or fixed-benefit plans advertised heavily. They're cheap because they're allowed to deny you for pre-existing conditions, cap payouts, and exclude major categories of care. For a 55–64-year-old — exactly when health issues become more likely — these can leave you dangerously exposed. Read the fine print with deep skepticism, and treat them as a last resort, not a plan.
As you approach 65, your bridge coverage needs to hand off cleanly to Medicare. A few rules prevent expensive mistakes:
The pre-65 coverage gap is real, and in 2026 it's pricier than it was — but it's manageable with a plan. For most early retirees the sequence is: use COBRA for a short, seamless bridge if needed; build your real base on the ACA marketplace, managing your income to capture whatever subsidy you qualify for; and check whether a spouse's plan, part-time benefits, or Medicaid beats it. Then line up a clean handoff to Medicare at 65.
Above all: run your actual numbers on Healthcare.gov before you set your retirement date. Health insurance is often the single biggest, most underestimated cost of retiring early — and it's far easier to plan for than to be surprised by.
Rules, costs, and figures change and vary by individual circumstances. This guide is general education, not personalized advice — confirm current details with the official sources above before deciding.