Retiring before 65: health insurance from 62 to 65
Medicare starts at 65 and not a day earlier. Retire at 62 and you need three years of coverage, and the two usual routes both changed price recently. Here is how to build the bridge and what it does to your first Medicare premiums.
The four routes, compared
| Question | ●COBRA | ●Marketplace (ACA) | ●Spouse’s employer plan | ●Retiree plan |
|---|---|---|---|---|
| Can it reach 65 from 62?36 months is the test. | No18 months, then it ends. | Yes | YesWhile the spouse works. | DependsRare outside public employers. |
| Price driverWhat actually sets your premium. | Full group premium + 2% | Age, county, income | Employer subsidy | Plan terms |
| Keeps your doctors and deductible?Mid-year switches reset deductibles. | Yes | Check the network | Check the network | Usually |
| Delays Part B at 65 without penalty?Only current employment coverage does. | No | No | Yes20+ employees. | No |
Marketplace math after the 2026 change
Marketplace premiums are age-rated, so a 62-year-old pays the highest rates on the exchange. Through 2025 the enhanced tax credit capped what most households paid at a percentage of income, with no upper income limit. That expired at the end of 2025. In 2026 the original rules are back: subsidies phase out and stop entirely above 400% of the federal poverty level, and the share of income you are expected to pay is higher at every level below it. For an early-retiree couple with modest pension income the subsidy may still be large; for a couple living on a severance year or a big IRA withdrawal, it may be zero. Because the subsidy is based on the income you report for the year, how much you withdraw from which account in each gap year is now a health-insurance decision as much as a tax one.
The plan that usually works
Price all four routes before you give notice
Get the COBRA rate from HR, marketplace quotes for your zip code and a realistic income figure, and the spouse’s plan cost to add you.
Sequence the income
Take severance and large withdrawals in the year you leave; keep the next two years’ taxable income low if the subsidy is worth more than the tax you would save. Remember that year sets your first Medicare premium.
Book the Medicare window
Enroll in the three months before your 65th birthday month so Part B starts on time, and end the bridge coverage the day before. Marketplace subsidies stop when you become eligible for Part A.
Sources
- U.S. Department of Labor, COBRA continuation coverage
- KFF, "How Will the Loss of Enhanced Premium Tax Credits Affect Older Adults?"
- HealthCare.gov, Medicare and the Marketplace
- Medicare.gov, "When does Medicare coverage start?"
- Social Security, "Medicare Premiums: Rules for Higher-Income Beneficiaries" (2026 tables; MAGI from your 2024 return)
Before-65 questions, answered
How much does health insurance cost from 62 to 65?
It depends on the route. COBRA is the full employer premium plus up to 2%: for family coverage that is commonly $2,000 or more a month. Marketplace premiums for a 60-year-old vary by county and, since the enhanced subsidies expired at the end of 2025, by income far more than before. Get real quotes for your zip code before you retire, not after.
How long does COBRA last?
Usually 18 months, so it cannot bridge a full 36-month gap from 62 to 65 on its own. Employers with fewer than 20 employees are not subject to federal COBRA; Utah’s mini-COBRA continuation rules are shorter.
What changed with marketplace subsidies in 2026?
The enhanced premium tax credits from 2021–2025 expired after 2025. Households above 400% of the federal poverty level lost subsidies entirely, and everyone else pays a larger share of income. Older early retirees were hit hardest because premiums are age-rated.
Can I keep a marketplace plan after 65?
You can keep it, but subsidies end once you are eligible for premium-free Part A, and marketplace plans are not creditable for Part B. Enroll in Medicare during your Initial Enrollment Period and end the marketplace plan the day before Part B starts.
Do the math
Income surcharge calculator
See what a severance year does to your first Medicare premiums.
Open the tool →Medicare and your HSA
If the bridge plan is an HSA plan, the six-month rule applies at 65.
Read the guide →
Talk it through before you decide
Bring your birth date, your work situation, and last year’s tax return. Leave knowing your enrollment window, what Medicare will cost you, and whether the income surcharge applies.
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