Retirement Health Insurance Options Prior to Medicare

Written By: Ryan Rink, CFP®, EA, ChFC®, CLTC®

One of the biggest concerns for retirees is health insurance, especially if they plan to retire before age 65 (when they are eligible for Medicare). If your employer doesn’t offer retiree health insurance to bridge the gap, two primary alternatives are COBRA and the Affordable Care Act (ACA) Open Marketplace.

COBRA can be great option since you’re able to continue coverage with your current employer’s health insurance plan. However, a couple of downsides are the premium can be quite pricey and the maximum continuation period coverage is 18 months.

The ACA Open Marketplace is another good alternative. You will likely qualify for a premium subsidy (also known as a Premium Tax Credit) on your health plan, but the amount will depend on your current income for that year. If you decide to obtain coverage through the ACA Open Marketplace, we recommend working with an independent health insurance agent, as navigating the website/selecting the appropriate plan can be a daunting task.