Top Health Insurance Options for Early Retirees (Ages 60–64, Before Medicare)

Overview

Retiring before age 65 can be a dream come true—but finding the right health insurance during those pre-Medicare years is a critical piece of the puzzle. Without employer coverage and before Medicare kicks in, early retirees ages 60 to 64 face unique healthcare challenges. The good news? You have options—many of which are designed to provide affordable, comprehensive coverage during this important transition.

In this guide, we’ll walk you through the most reliable health insurance choices for early retirees. You’ll learn how each option works, who it’s best for, and how to make an informed decision based on your budget, health needs, and retirement goals.

What Happens to Health Insurance Before Medicare?

Retirees aren’t automatically covered after leaving their jobs. Medicare typically begins at age 65 if there are no prior qualifying conditions, leaving a gap for those who retire earlier. That means you’ll need to seek coverage on your own—either through the individual marketplace, a spouse’s employer, or other specialized routes.

Key considerations include:

• Your household income (affects ACA subsidies, or financial assistance for monthly premiums )
• Your health status and ongoing care needs
• Whether you recently had job-based coverage
• Your openness to coverage alternatives

These factors will influence which plan types fit best. Let’s explore each in detail.

Health Insurance Options for Early Retirees (Age 60–64)

1. Affordable Care Act (ACA) Marketplace Plans

The ACA Marketplace offers individual and family health plans that comply with federal standards. These plans are guaranteed issue, meaning insurers cannot deny you for pre-existing conditions.

Why it matters:

• It’s one of the most accessible and regulated options.
• Premium subsidies (based on income) can reduce monthly costs.
  • Answer a few easy questions in our ACA Subsidy Calculator to determine if you are eligible for a subsidy.
    
    

Best for retirees with moderate-to-low income who want comprehensive coverage and are willing to shop on HealthCare.gov or their state exchange.

2. COBRA Continuation Coverage

If you’re leaving a job with employer-sponsored coverage, COBRA medical insurance  (Consolidated Omnibus Budget Reconciliation Act) allows you to continue the same plan for up to 18 months.

Why it matters:

• You can keep your current doctors and network without gaps in care.
• No new deductibles or plan changes.

Watch out for:

• You’ll pay the full premium—often 2–3x what you paid while working.

Best for those who want to maintain current coverage for a limited time, especially if you are close to hitting your medical deductible maximum, and aren’t yet ready to switch to a new provider.

3. Spouse’s Employer-Sponsored Insurance

If your spouse is still working, you may be eligible to join their employer’s plan—even after you’ve retired.

Why it matters:

• Often more affordable than ACA or COBRA.
• Group rates can offer broader coverage at lower costs.

Things to know:

• Enrollment might need to happen during your spouse’s open enrollment period or as a qualifying event.

Best for retirees whose spouse has active job-based coverage. This is frequently the most budget-friendly and comprehensive option available.

4. Short-Term Health Insurance

Short-term medical insurance plans provide limited coverage for a set period of three months plus a maximum one-month extension, however, other carriers such as Pivot Health offer plans up to 12 months in many states.

Short-term medical plans are intended for gaps, not long-term use.

Why it matters:

• Easy to enroll anytime, not just during open enrollment.
• Premiums are lower than traditional insurance, but so are benefits.

Keep in mind:

• Many plans exclude pre-existing conditions, preventive care, and don’t cover essential services as defined by the ACA.

Best for healthy retirees who only need coverage for a brief time and understand the limits.

5. Health Care Sharing Ministries (HCSMs)

These are not insurance plans, but cost-sharing arrangements among members, often faith-based, who help cover each other’s medical expenses.

Why it matters:

• Monthly contributions are usually much lower than premiums.
• Can provide a financial buffer for unexpected health events.

Caveats:

• They don’t follow ACA rules and can exclude pre-existing conditions, preventive care and limit services.
• Not ideal if you need regular care.

Best for healthy, faith-based individuals seeking lower-cost options and who understand the trade-offs of non-insurance programs.

6. Part-Time Work with Health Benefits

Some companies offer health insurance to part-time employees. For retirees not ready to fully leave the workforce, this can be a win-win.

Why it matters:

• Access group health insurance and earn extra income.
• Good fit for those who want purpose, structure, or supplemental income.

Examples:

• Starbucks, Trader Joe’s, and Costco are known to offer benefits to part-time staff.

Best for retirees open to light work in exchange for health coverage.

FAQ

Q: Can I just go uninsured until Medicare?
Yes, but that’s risky. A major health issue could be financially devastating. 

Q: What income counts for ACA subsidies?
Subsidies are based on your Modified Adjusted Gross Income (MAGI), which includes wages, retirement withdrawals (except Roth), Social Security, and other taxable income.

Q: Do HSA funds help during early retirement?
Yes—funds from your HSA can be used tax-free for medical expenses. You can also use them to pay for your health insurance premiums without penalties. Plus, you can also contribute an extra $1,000 per year after age 55.

Actionable Steps to Choose the Right Plan

Here’s a checklist to help you get started:

• Estimate your retirement income for subsidy planning
• Check ACA plans and calculate subsidy eligibility
• Review your eligibility for COBRA or your spouse’s employer plan
• Evaluate short-term or sharing plans only as temporary options
• Consider part-time roles if you’re open to supplemental work
• Use HSA funds or Roth withdrawals to manage tax impacts
• Mark your calendar for the Annual Open Enrollment Period (OEP) or qualifying events

Bottom Line: Your Bridge to Medicare Can Be Strong

Retiring early doesn’t mean giving up great health coverage—it just takes a bit of planning. From ACA subsidies to spouse coverage and creative strategies like part-time work, you have multiple ways to stay covered until Medicare begins. By understanding your options now, you’ll protect your health and your wallet for years to come.

Next Step: Start comparing health plans now on Healthcare.com or talk to a licensed insurance agent to find a solution that fits your retirement lifestyle.