Early retirees under the age of 65 have a variety of health insurance options to choose from while waiting for Medicare to kick in. These include Medicaid, short-term health insurance, insurance through employment, COBRA and private marketplace plans — all of which can vary in cost. The average marketplace health insurance plan without Medicare costs about $946 for a Bronze plan for 60-year-olds, but this can change depending on the desired coverage level.
Medicare is available to those 65 or older or those who are younger but disabled or have specific medical conditions like end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS). However, most people retire before they qualify for Medicare, creating a need to bridge the coverage gap.
TABLE OF CONTENTS
- Early Retirement Health Insurance Costs
- Cheapest Health Insurance Plans for Early Retirees
- Early Retirement Health Insurance Options
- FAQ
Key Takeaways
Medicaid is the most affordable health insurance for retirees under 65. However, eligibility is dependent on your household's income.
The average monthly cost for a Silver health plan on the marketplace for seniors aged 60 is $1,231, but a lower coverage plan can decrease monthly premiums.
Health insurance options for early retirees include Medicaid, COBRA, short-term insuranceand marketplace policies.
Early Retirement Health Insurance Costs
Health insurance for retirees is typically more expensive, given that older adults generally require more frequent care. While lower premium plans may be attractive, they may not offer the best maximum out-of-pocket costs (MOOP) or coverage.
Insurance plans are categorized into metal tiers, and your premiums will vary accordingly. If rates are your chief concern, review the average cost of health insurance for a typical 60-year-old in the table below to compare metal tiers. Many consumers prefer to start with a Silver plan and are able to review its preferred in-network physicians before upgrading, if necessary.
Average Cost of Marketplace Health Insurance Plans for Seniors
| Catastrophic | Monthly Cost$726 | Maximum-Out-Of-Pocket$9,450 |
| Bronze | Monthly Cost$946 | Maximum-Out-Of-Pocket$9,356 |
| Expanded Bronze | Monthly Cost$974 | Maximum-Out-Of-Pocket$8,915 |
| Silver | Monthly Cost$1,231 | Maximum-Out-Of-Pocket$5,186 |
| Gold | Monthly Cost$1,304 | Maximum-Out-Of-Pocket$7,576 |
| Platinum | Monthly Cost$1,925 | Maximum-Out-Of-Pocket$2,441 |
Note that Catastrophic plans are only available in some areas and are limited to a specific population. Generally, Catastrophic plans are only available to people under 30. However, older adults can purchase them if they do not have any other choices that cost less than 8.09% of their monthly income.
SENIOR HEALTH CARE COSTS: DO THE MATH
Low premiums often result in high deductibles, which may not be ideal for seniors who need to visit the doctor regularly. Instead, seniors may want to opt for a policy with a higher premium, lower deductible and better coverage. This way, cost-sharing can begin sooner, benefiting people frequently seeking care.
Compare Health Insurance Rates
Ensure you're getting the best rate for your health insurance. Compare quotes from the top insurance companies.
Cheapest Health Insurance Plans for Early Retirees
For a typical 60-year-old, the most inexpensive insurance provider in the Bronze tier, excluding eligibility-restricted Catastrophic plans, is Oscar, at an average monthly rate of $736.
In contrast, the top-tier Platinum plan by Blue Cross Blue Shield offers an average premium of $1,996 monthly, a substantial increase in cost that comes with significantly lower out-of-pocket risks.
While lower premiums can be appealing, they often mean higher total costs when seeking care due to higher maximum out-of-pocket amounts, potentially discouraging you from seeking the care you need.
The table below displays the cheapest average health providers nationwide and their premiums, sorted by metal tier:
| Oscar | Metal TierBronze | Monthly Cost$736 | Maximum-Out-Of-Pocket$9,100 |
| Medica | Metal TierCatastrophic | Monthly Cost$584 | Maximum-Out-Of-Pocket$9,450 |
| Aetna | Metal TierExpanded Bronze | Monthly Cost$920 | Maximum-Out-Of-Pocket$9,403 |
| Aetna | Metal TierGold | Monthly Cost$1,093 | Maximum-Out-Of-Pocket$8,965 |
| Blue Cross Blue Shield | Metal TierPlatinum | Monthly Cost$1,996 | Maximum-Out-Of-Pocket$2,977 |
| Aetna | Metal TierSilver | Monthly Cost$1,100 | Maximum-Out-Of-Pocket$8,780 |
Cheapest Health Insurance Plans for Early Retirees by State
Health insurance plan costs differ vastly by location and chosen coverage levels. The three least expensive Silver health insurance plans across all states for a typical 60-year-old are:
- Valley Health Plan: $424 per month
- WellSense Health Plan: $691 per month
- Blue Cross Blue Shield: $687 per month
Actual rates for health insurance plans are subject to change due to specific factors such as the region where you live, whether you use tobacco, your income and your household size. Remember to balance monthly premiums against potential out-of-pocket costs. The most cost-effective plan should align with both your health care needs and financial situation.
The table below highlights the premiums and maximum out-of-pocket costs of each state's cheapest health insurance plans for a typical 60-year-old adult:
Data filtered by:Results filtered by:
State:
- AK
- AL
- AR
- AZ
- CA
- CO
- CT
- DC
- DE
- FL
- GA
- HI
- IA
- ID
- IL
- IN
- KS
- KY
- LA
- MA
- MD
- ME
- MI
- MN
- MO
- MS
- MT
- NC
- ND
- NE
- NH
- NJ
- NM
- NV
- OH
- OK
- OR
- PA
- RI
- SC
- SD
- TN
- TX
- UT
- VA
- VT
- WA
- WI
- WV
- WY
State:AK
| AK | CompanyModa | PlanModa Pioneer Bronze 5500 | Monthly Cost$1,188 | Maximum-Out-Of-Pocket$9,250 |
| AK | CompanyModa | PlanModa Pioneer Alaska Standard Bronze | Monthly Cost$1,115 | Maximum-Out-Of-Pocket$9,400 |
| AK | CompanyModa | PlanModa Pioneer Bronze 6500 | Monthly Cost$1,192 | Maximum-Out-Of-Pocket$9,000 |
| AK | CompanyBlue Cross Blue Shield | PlanPremera Blue Cross Standard Bronze II | Monthly Cost$1,345 | Maximum-Out-Of-Pocket$9,400 |
| AK | CompanyBlue Cross Blue Shield | PlanPremera Blue Cross Alaska One Bronze | Monthly Cost$1,386 | Maximum-Out-Of-Pocket$8,700 |
| AK | CompanyBlue Cross Blue Shield | PlanPremera Blue Cross Preferred Bronze 6350 | Monthly Cost$1,388 | Maximum-Out-Of-Pocket$8,700 |
| AK | CompanyBlue Cross Blue Shield | PlanPremera Blue Cross Preferred Bronze 5800 HSA | Monthly Cost$1,394 | Maximum-Out-Of-Pocket$7,300 |
| AK | CompanyModa | PlanModa Pioneer Gold 1500 | Monthly Cost$1,669 | Maximum-Out-Of-Pocket$6,000 |
| AK | CompanyModa | PlanModa Pioneer Alaska Standard Gold | Monthly Cost$1,672 | Maximum-Out-Of-Pocket$8,700 |
| AK | CompanyBlue Cross Blue Shield | PlanPremera Blue Cross Standard Gold | Monthly Cost$1,812 | Maximum-Out-Of-Pocket$8,700 |
| AK | CompanyBlue Cross Blue Shield | PlanPremera Blue Cross Alaska One Gold | Monthly Cost$1,823 | Maximum-Out-Of-Pocket$6,300 |
| AK | CompanyBlue Cross Blue Shield | PlanPremera Blue Cross Preferred Gold 1500 | Monthly Cost$1,825 | Maximum-Out-Of-Pocket$6,300 |
| AK | CompanyModa | PlanModa Pioneer Alaska Standard Silver | Monthly Cost$1,829 | Maximum-Out-Of-Pocket$9,100 |
| AK | CompanyModa | PlanModa Pioneer Silver 4500 | Monthly Cost$1,879 | Maximum-Out-Of-Pocket$7,750 |
| AK | CompanyBlue Cross Blue Shield | PlanPremera Blue Cross Standard Silver | Monthly Cost$2,058 | Maximum-Out-Of-Pocket$9,100 |
| AK | CompanyBlue Cross Blue Shield | PlanPremera Blue Cross Preferred Silver 4500 | Monthly Cost$2,103 | Maximum-Out-Of-Pocket$8,200 |
Early Retirement Health Insurance Options
Early retirement can affect your health benefits, and finding affordable health insurance may take some consideration. While a senior’s Social Security benefits can be collected starting at 62, Medicare benefits do not kick in until age 65.
This means many seniors need to bridge the gap in health insurance until Medicare can apply. While it may be more affordable to wait, having health insurance while aged 62 to 65 is crucial to avoid hefty medical fees.
Fortunately, there are several ways to get health insurance for retirees under 65, including COBRA, short-term retirement insurance plans, Medicaid and marketplace plans.
1
Workplace Insurance
If your spouse is still working, you may be able to join their employer-sponsored health insurance plan. However, there may be cost implications, such as an increase in your spouse’s premiums. You may also find employer-sponsored insurance if you get another job after retirement.
2
COBRA
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), employers are required to offer the option to let retirees, regardless of their age, continue their health benefits for a limited time. However, eligibility depends on your circ*mstances, such as if you voluntarily or involuntarily lose your job, reduce your hours worked, switch jobs or lose a spouse. Those who qualify must pay up to 102% of the policy's total cost.
3
Short-Term Insurance
A short-term insurance plan is another health insurance plan for retirees under 65. It replaces gaps in coverage for up to one year, although it can be extended. However, a short-term insurance plan does not provide comprehensive coverage and doesn’t provide long-term financial protection for most health needs. Not all individuals are eligible, as providers can deny an application based on your medical history.
4
Medicaid
Medicaid is an affordable health insurance option for low-income individuals and early retirees. However, eligibility is based on income and can vary from state to state. For instance, in Arizona, you must be 138% below the federal poverty level to qualify for Medicaid, while in the District of Columbia, the requirement is 215%. Make sure to check your state's Medicaid income eligibility limits for details.
5
Marketplace Plans
Seniors can get affordable health insurance through the Health Insurance Marketplace in their state. While there is typically an enrollment period, losing employer-based health insurance is a qualifying event that grants seniors a special enrollment period. Depending on their household income, seniors may also qualify for a premium tax credit.
6
Employer-Sponsored Retirement Plans
Some employers offer health insurance to retirees as part of their benefits package, such as coverage under 401(k) plans. However, coverage details and eligibility can vary widely. Always review these plans for cost, coverage scope and whether they extend to dependents.
CAN YOU GET MEDICARE AT AGE 62?
Typically, you cannot access Medicare before age 65, even if you retire early. However, exceptions exist, such as if you have been on Social Security Disability Insurance (SSDI) for at least two years or have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).
Accessing the Health Insurance Marketplace as an Early Retiree
If alternative options aren’t a good fit, the marketplace offers health insurance for early retirees and is an excellent option for seniors looking to bridge health insurance until Medicare starts. The Affordable Care Act (ACA) makes marketplace plans more accessible and affordable for qualifying seniors.
Marketplace insurance plans provide various coverage levels and premiums for retirees under 65. The ACA has capped rates at no more than three times the cost for a 21-year-old to keep insurance costs in check for older individuals.
Through the Health Insurance Marketplace application process, you can determine if you are eligible for Medicaid or qualify for premium tax credits. Premium tax credits can help you reduce your monthly premiums and typically apply to households with incomes between 100% and 400% of the federal poverty level (FPL).
Additional savings are available through cost-sharing reductions for those with incomes between 100% and 250% of the federal poverty level and on a Silver plan, lowering deductibles, copayments and out-of-pocket maximums.
Unlike short-term insurance, you can enroll through the marketplace even with pre-existing health conditions. Remember that plans and eligibility can vary by state, and enrollment is typically only available during the annual open enrollment period. Qualifying life events like retirement can trigger a special enrollment period.
FAQ About Affordable Health Insurance for Retirees Under 65
Finding health insurance for retirees under 65 will help you stay protected. Review our answers to commonly asked questions on bridging the gap between retirement and Medicare eligibility.
What is the best health insurance for retirees under 65?
The best health insurance for early retirees depends on a number of factors. These include when they retire and how long they expect to be without coverage, as well as their medical needs, financial status and available options.
What's the cheapest health insurance for seniors under 65?
In most states, a Bronze plan is the cheapest option available to seniors, costing an average of $736 per month for 60-year-olds. However, this plan offers limited coverage and may not be enough for your medical needs, depending on how frequently you require access to health care.
Can you get Medicare before age 65?
Generally, you cannot get Medicare if you are younger than 65, with exceptions for certain unique circ*mstances (like a diagnosis of end-stage renal disease). In the meantime, you can supplement your health insurance with other options, such as an employer-based health benefit, a private marketplace plan, Medicaid, COBRA or short-term insurance.
Can a spouse get Medicare before age 65?
No, if your spouse is younger than 65 and you are already on Medicare, they cannot join you.
How much does health insurance cost for early retirees?
Health insurance costs an average of $1,231 per month for a 60-year-old on a Silver plan, but other options, like if you qualify for subsidies or cost-sharing reductions, may make it more affordable.
About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
sources
- HealthCare.gov. "Affordable Care Act (ACA)." Accessed June 4, 2024.
- American Council on Aging. "State Specific Medicaid Eligibility Requirements." Accessed June 4, 2024.
- U.S. Department of Labor. "Continuation of Health Coverage (COBRA)." Accessed June 4, 2024.
