How to Get Health Care in Retirement Before You’re Eligible for Medicare

How to Get Health Care in Retirement Before You’re Eligible for Medicare

1000 667 Jennifer Nelson

Dreaming of traveling, volunteering or just spending more time with family in retirement? Sounds pretty great, right? Not quite so fast.

If you’ve decided to retire early, then you’ve got some extra time to explore everything — but you also have longer to wait until you qualify for Medicare. That means securing some form of interim coverage in the meantime.

So, how do you plan for your health care in retirement before you can access Medicare? The following three questions will help guide you to the best solution for you.

1. How Long Until Medicare Kicks In?

If you’ve retired before age 65, when Medicare eligibility kicks in, you have many options for bridging the gap. Finding the right one depends on your particular circumstances, including how long that gap will be.


If there are just a few months until you reach Medicare eligibility, the Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, allows you to keep your current employer health care coverage after you’ve left your job. But you’ll likely have to pay the full cost of your health coverage, plus an additional 2% charge, which can be pricy. Very few employers subsidize COBRA, making it one of the most expensive choices — and best for only the briefest periods.

Short-Term Insurance

A less expensive option could be a short-term policy. In some states, short-term plans can last as long as a year, with up to two renewals. That said, these plans are best for people with lighter medical needs — they don’t always cover preexisting conditions or preventive services. However, they do provide basic coverage in case you experience an unplanned medical event before you get Medicare. Short-term plans may work well paired with a supplemental policy, such as accident insurance.

Your Spouse’s Plan

If your spouse still works, you may be able to find or continue coverage on their plan. This is usually a cost-effective option — even if you have years until you reach Medicare eligibility — as long as your spouse continues working. Under a spouse’s plan, you’ll have access to a full suite of health care services.

2. Do You Have Any Preexisting Conditions?

Having one or more preexisting conditions means you’ll need to be extra careful in planning your health care in retirement. If you have one, lacking coverage for any period of time can be risky. Most short-term policies and supplemental plans won’t cover preexisting conditions, so you’ll likely need a major medical policy.

Marketplace Plan

The Affordable Care Act provides Marketplace plans to anyone who is not eligible for Medicare. You cannot be denied for having preexisting conditions, and there’s a chance you’ll qualify for a government subsidy that reduces the costs of your premiums. Depending on the region, though, you may find limited offerings and have to pick from mostly high-deductible plans.

Private Insurance

Retirees can obtain insurance through private agents, insurance companies and certain professional organizations. These policies may or may not have exclusions for preexisting conditions, so examine them carefully before enrolling in a policy.

3. Do You Have Significant Health Needs?

If you know you’ll need a major procedure in the near future, plan your retirement with that in mind. In these cases, short-term or supplemental coverage might not be the right fit — but it pays to consider the options.

Major Medical Insurance

Equipping yourself with major medical insurance from the Marketplace, a spouse’s employer or COBRA will help limit your share of costs and make them more predictable.

Supplemental Insurance

Of course, you may end up having significant health needs you didn’t anticipate. Supplemental health plans help absorb the financial blow of expensive services.

Critical illness, accident and hospital indemnity insurance plans can be bundled with a major medical plan from the Marketplace or a private insurer to cover you until you hit Medicare eligibility. These policies pay lump sums to help with deductibles, prescriptions or any other costs you may need to take care of, like mortgage payments. Because they may not cover preexisting conditions, they often work better for unpredictable health issues than for planned procedures.

Parting Thoughts

Here are some additional tips to help you plot out how you’ll manage your health care in retirement, whether you leave work before age 65 or after.

  • Don’t undervalue the benefit of a healthy lifestyle. Medical care in retirement can be significantly cheaper when you’re in good health. Just because you’re retired, don’t make it an excuse to skip out on exercising, eating right and getting preventive care.
  • Don’t underestimate the cost of health care. When you worked, your employer likely paid a large portion of your health care costs, and the rest was deducted from your paycheck. In retirement, more of these costs fall to you. If you stop working before 65, expect to spend $500 to $1,000 per month for health insurance.

What your retirement looks like is entirely up to you. No matter when you retire, you have options that can protect your health (and your finances) until you’re eligible for Medicare.

Jennifer Nelson

Jennifer Nelson is an award winning health, health IT, and personal finance writer.

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