How Do Early Retirees Get Health Insurance? 5 Options Before Medicare

Option 1: ACA Marketplace (Best for Most)

The ACA marketplace offers guaranteed-issue plans regardless of health status. Premium tax credits are available if your MAGI stays below 400% of the Federal Poverty Level (~$79,760 for a couple in 2025).

The key: manage your income. Withdraw from Roth accounts (not taxable income) to keep MAGI low. A couple with $60,000 MAGI might pay $400-$800/month for a Silver plan after credits — versus $2,000+ without.

This is why Roth accounts are so valuable for early retirees — they provide spending money without generating taxable income that disqualifies you from healthcare subsidies.

Options 2-5: Alternatives

COBRA: Continues your employer plan for 18 months (36 for some qualifying events). Full premium cost (employer no longer subsidizes) — often $1,500-$2,500/month for a couple. Useful as a short bridge.

Spouse's employer plan: If one spouse still works with employer coverage, this is often the simplest and most cost-effective option.

Health sharing ministries: Not insurance. Members share medical costs. Lower monthly costs but no guaranteed coverage for pre-existing conditions and no legal obligation to pay claims.

Short-term plans: Limited coverage (12 months max in many states). Medical underwriting (pre-existing conditions excluded). Low premiums but significant coverage gaps.

Want to Model Healthcare Bridge Costs?

The analysis at myaifinancialplan.com projects pre-Medicare healthcare costs year by year with ACA subsidy calculations based on your projected income. Start free at myaifinancialplan.com.