Medicare starts at 65 for most people. If you retire or lose job-based coverage before then, you need to find health insurance to cover the gap - which could be anywhere from a few months to several years depending on when you stop working.
This article explains the main options available to people in that pre-Medicare window, along with some honest context about what each one involves in 2026.
Why does the gap before Medicare at 65 matter?
Retiring before 65 leaves you responsible for finding your own health coverage, which could span months or years. The cost picture changed significantly in 2026 when enhanced federal subsidies expired. Understanding your options and running the numbers for your specific income and state is more important than ever.
Retiring before 65 used to be simpler from a health insurance standpoint, particularly in recent years when federal subsidies made Marketplace coverage relatively affordable for many early retirees. That landscape shifted at the start of 2026, when enhanced premium tax credits that had been in place since 2021 expired, and Congress has not yet reinstated them as of this writing.
That does not mean coverage is unavailable - but the cost picture for many people, particularly those with moderate-to-higher incomes, has changed significantly. Understanding your options and running the numbers for your specific situation is more important than ever.
Option 1: ACA Marketplace Coverage (Healthcare.gov)
The Affordable Care Act Marketplace - sometimes called the exchange or, informally, Obamacare - is the most common coverage option for early retirees who do not have access to employer or retiree insurance. Plans are available in every state, cover pre-existing conditions without exclusion, and include preventive care at no additional cost.
What changed in 2026. The enhanced premium subsidies that were available from 2021 through 2025 expired at the end of 2025. For 2026, subsidy eligibility has returned to the pre-2021 structure: income-based tax credits are generally available for households with income between 100% and 400% of the federal poverty level. People above 400% of the federal poverty level are not eligible for federal premium tax credits in 2026 under current rules, though Congress is discussing whether to restore the enhancements.
According to KFF (kff.org), the average unsubsidized benchmark premium for a 60-year-old is roughly $15,900 per year in 2026 - a meaningful figure for anyone budgeting early retirement. Costs vary by state, plan type, and age, so actual premiums differ from person to person.
If your income is below 400% of the federal poverty level, you may still qualify for tax credits that reduce your monthly premium. The size of the credit depends on your income and the cost of plans in your area.
A few states - including California, Colorado, Connecticut, Maryland, Massachusetts, and New Mexico - have their own additional subsidy programs that may offset some of the federal reduction. If you live in one of those states, it is worth checking your state's Marketplace directly.
Where to start: healthcare.gov (or your state's Marketplace if it has its own platform). A licensed insurance navigator or broker can help you understand what you would actually pay given your income and location.
Option 2: COBRA
If you leave a job with employer-sponsored health insurance, COBRA allows you to continue that same coverage for a limited time - generally up to 18 months. The catch is that you pay the full premium, including the portion your employer previously covered, plus a small administrative fee.
COBRA can be a useful bridge if you are close to 65 or expect to have other coverage available soon. It is generally not cost-effective as a long-term solution because the unsubsidized cost tends to be high.
One important Medicare interaction: if you delay enrolling in Medicare Part B while on COBRA after age 65, you may face a late enrollment penalty when you do eventually enroll. Whether COBRA counts as creditable coverage for Medicare Part B purposes can depend on your specific situation. We recommend checking with Medicare or a licensed benefits counselor to understand how COBRA may affect your enrollment timing. See our article on retiree and employer coverage for more on this.
You generally have 60 days from losing coverage to elect COBRA. Missing that window means you lose the option.
Option 3: Coverage Through a Spouse or Partner
If your spouse or domestic partner has employer-sponsored health insurance, losing your own job-based coverage is typically a qualifying life event that allows you to join their plan outside of open enrollment. This can be one of the more affordable options depending on what the employer's plan costs for dependents.
Confirm the details with your spouse's HR department, including cost and what the coverage includes, before making any decisions about other coverage.
Option 4: Medicaid
If your income is low enough, you may qualify for Medicaid rather than Marketplace coverage. In states that have expanded Medicaid under the ACA, eligibility generally extends to adults with income up to 138% of the federal poverty level. In states that have not expanded Medicaid, eligibility thresholds are typically much lower.
Medicaid eligibility is based on current income, not annual projected income, which makes it a consideration for people whose income drops significantly in early retirement. Your state Medicaid office or healthcare.gov can help you determine whether you qualify.
Option 5: Retiree Coverage from a Former Employer
Some employers - typically larger ones - offer health coverage to retirees before they reach Medicare age. According to KFF, only a minority of large firms that offer health benefits also provide retiree coverage to workers under 65, so this option is available to a smaller share of people than it once was.
If you have access to retiree coverage, it is worth comparing carefully to Marketplace options before deciding which to use. And if you drop retiree coverage, most plans will not allow you to re-enroll later - so that decision is typically permanent.
A Note on Short-Term and Alternative Plans
You may see advertisements for short-term health plans or health care sharing ministries as lower-cost alternatives. These are not ACA-compliant plans and do not carry the same protections - they can exclude pre-existing conditions, cap benefits, and deny claims in ways that compliant plans cannot. They may be appropriate in very limited circumstances, but for most pre-65 seniors managing ongoing health needs, the risks of gaps in coverage are significant. A licensed insurance broker or navigator can help you understand the full picture.
How does pre-65 coverage connect to Medicare enrollment timing?
Whatever coverage you use before 65, Medicare enrollment windows still apply. Missing certain enrollment periods, particularly for Part B and Part D, can result in permanent late enrollment penalties. Tracking these timelines in advance helps you avoid costly mistakes when you do become eligible.
Whatever coverage you use in the pre-65 window, keep track of your Medicare enrollment timing. Missing certain enrollment windows - particularly for Part B and Part D - can result in permanent late enrollment penalties. Our articles in the Medicare overview section cover how that timing works.
Where to Get Help
- HealthCare.gov: the federal Marketplace, or your state's Marketplace platform
- Medicare.gov: for understanding how your current coverage will interact with Medicare when you turn 65
- Licensed insurance navigators: free assistance available through HealthCare.gov to help compare plans and understand subsidies
- SHIP counselors: free Medicare counseling for people approaching 65; find yours at shiptacenter.org or call 1-877-839-2675
Health insurance costs, subsidy eligibility, and program rules are subject to change. Speaking with a licensed insurance navigator or broker about your specific income, state, and situation is the most reliable way to understand what coverage will actually cost you.