You’re Retiring Early—Now What About Health Care?

Social Security will start paying early retirement benefits when you’re 62, but Medicare doesn’t kick in until you’re 65.

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You’ve worked hard all your life and now want to retire early. You’re not alone.

According to a 2024 Mass Mutual Survey, the average retirement age is 62. That’s when you’re eligible for Social Security benefits.

But even if you have the assets and income to retire at 62, there’s still the matter of health insurance.

At 62, you can’t collect Medicare. Generally, Medicare is for people 65 or older, unless they have a disability and or other specified chronic illnesses. So, just because you’re collecting Social Security at an early age doesn’t mean you'll have health insurance through Medicare. They aren’t connected.

There are other options you can turn to for health insurance, however, including insurance from a spouse, COBRA, private health insurance, and others. Here’s an overview.

COBRA

Most employers are required to offer health insurance coverage to former employees through the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Your former employer is not required to subsidize your COBRA payments—under COBRA, you would be required to pay the full premium.

Although it’s not cheap, COBRA can be used to initially bridge the gap between retirement and Medicare.

The downside: COBRA is only available for the first 18 months after leaving employment.

Health Insurance Marketplace

An easy and sometimes inexpensive way to purchase health insurance is through the Health Insurance Marketplace.

As an early retiree, and depending on the plan you choose, you might find your co-payments are less expensive. But be warned, sometimes the deductibles are high.

As for the premium cost, specific household sizes and income amounts may result in premium tax credits and savings. As a result, many early retirees have small premiums. The upside is that these plans allow preexisting conditions. The downside is that often the deductible is high.

Your Spouse’s Insurance

If your spouse is still working and has insurance, consider going on his or her plan as a dependent.

This option will cost more but is probably the easiest way to work around your insurance loss.

Private Health Insurance

Contacting a private health insurance company is a similar process to the Health Insurance Marketplace. Since these plans are purchased privately, however, you may have more options than the Marketplace.

However, keep in mind that with private health insurance, you won’t receive premium tax credits. The cost will be higher depending on the plan.

Health Share Plans

Health share plans, often called health share ministries, aren’t actually health insurance. They comprise groups that agree to pool money to cover medical expenses. But usually, coverage is limited to basic health care and catastrophic care.

Many health share plans are faith-based and may require you to submit a statement of faith. However, there are some secular plans available.

Importantly for seniors, many health share plans don’t cover preexisting conditions; they typically require a waiting period, which can range from a year to five years.

And as a new member, you may have to pay into the plan for several months before requesting coverage.

Health share plans are generally for healthy individuals who only need basic or catastrophic coverage.

Part-Time Work

Part-time work is great if you want to draw less from your portfolio for living expenses. But it can also be a place to find health insurance.

Some companies offer health insurance benefits to part-time employees. Two of them are Starbucks and Amazon. Both employers contribute to the cost of insurance for their part-time employees, but the employee cost varies widely depending on a variety of factors, including work status, type of plan, and the dependents you cover.

Health Insurance Costs for Retirees

The monthly cost for an individual health insurance plan increases as you age.

For example, a 50-year-old can expect to pay roughly $795 per month for a plan through the Health Insurance Marketplace, while a 60-year-old will pay $1,208 monthly.

If you go through the Health Insurance Marketplace, however, you may be eligible for a premium tax credit to reduce your costs. In fact, 92 percent of Marketplace recipients get a break this way. Before the tax break, plans and prices on average range from a premium of $655 a month for a gold plan, to $590 a month for a bronze plan.

Keep in mind that the lower the premium, the higher the deductible and co-pays may be.

Medicare: Not the Answer in Early Retirement

Social Security will start paying early retirement benefits at 62, but Medicare doesn’t kick in until 65, regardless of Social Security benefits. Medicare Part A and Part B require you to be 65 or older.

And you can’t sign up for a Medicare Advantage plan or a Medicare Supplement insurance plan until you have Medicare Part A and Part B.

If your spouse is 65 and you are younger, you are still not eligible for Medicare. The fact that you’re ineligible for Medicare has no bearing on your spouse’s benefit, however.

And if you enroll in Medicare when turning 65, you can’t put a younger spouse on your plan.

Once you turn 65, you must sign up for Medicare, or you'll incur a penalty that will affect your future Medicare premiums.

The exception to this, according to Medicare, is if you are working full-time for a company with more than 20 employees and have health insurance through that job.

The only exception to the 65-age rule is if you are receiving Social Security disability benefits, are in end-stage renal disease, or have ALS (Lou Gehrig’s disease).

Shop Around

To plan for health insurance, evaluate your health needs and budget. If you are generally healthy, you might do well with a higher deductible and lower premium.

Shop around before you retire to find a plan that suits your circumstances.

But remember that to sign up for any plan, you must have a qualifying event such as a job change or retirement. Otherwise, you’ll need to wait for open enrollment in the fall. It’s important to plan early.

The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.