Retiring Before Medicare? Here are 5 Health Insurance Options to Consider

One of the biggest challenges early retirees face is figuring out how to get health insurance before Medicare kicks in at age 65. If you're planning to retire early, you need a strategy to cover your healthcare costs, as a medical emergency could derail your financial future.

Fortunately, there are several options to bridge the gap between retirement and Medicare. In this post, we’ll explore five health insurance options to consider, plus a creative alternative that might be a great fit for some retirees.

1. COBRA: Extending Your Employer Coverage

COBRA (Consolidated Omnibus Budget Reconciliation Act) allows you to continue your employer-sponsored health insurance for up to 18 to 36 months after leaving your job. This can be a convenient option because you’ll maintain the same doctors and benefits.

However, COBRA can be expensive because your employer is no longer subsidizing your premium. You’ll pay the full cost of the plan plus a 2% administrative fee. If you’ve already met your deductible or out-of-pocket maximum for the year, it might make sense to stay on COBRA for a short period.

2. Affordable Care Act (ACA) Marketplace Plans

If you retire before Medicare, ACA marketplace plans (also known as Obamacare) are a popular option. The key advantage? You can qualify for premium tax credits based on your taxable income.

Since these plans cannot deny coverage for pre-existing conditions, they can be a great choice for retirees with ongoing medical needs.

🚨 Potential Downsides:

• Premium costs are rising (with a 7% increase in 2025).

• Plans are state-specific, so check for coverage availability if you plan to travel.

3. Private Health Insurance

If ACA plans are too expensive or don’t meet your needs, you can explore private health insurance options through brokers. A private broker can compare multiple plans, including short-term medical coverage and off-marketplace options.

However, private health plans are generally more expensive than ACA plans unless you’re in excellent health and can qualify for lower-cost coverage.

4. Get a Part-Time Job with Health Benefits

Some companies offer health insurance to part-time employees, making it an attractive option if you’re willing to work 20–30 hours per week. This strategy lets you stay insured while earning extra income to support your retirement lifestyle.

Popular companies that provide health benefits to part-time employees include:

• Costco (typically 23+ hours per week)

• Amazon

• Starbucks

• Chipotle

• UPS

If you enjoy social interaction or want to ease into retirement, this could be a smart way to secure affordable health insurance.

5. Healthcare Sharing Plans (Faith-Based Options)

Healthcare sharing ministries are not traditional insurance, but they allow members to share medical expenses. These programs are often faith-based and require participants to adhere to specific lifestyle guidelines.

While they cost less than traditional insurance, there are risks:

• No legal contract guarantees payment.

• Not regulated by state insurance laws.

• Pre-existing conditions may not be covered.

If you’re comfortable with the uncertainty and meet the eligibility requirements, this could be a budget-friendly alternative.

Bonus: Think Outside the Box—International Health Insurance

If you’re considering moving abroad or slow traveling during retirement, international health insurance could be an affordable alternative. Many countries offer high-quality healthcare at a fraction of U.S. costs.

Some retirees opt for global health insurance policies that cover everything except care in the U.S., significantly lowering premiums. If you’re open to international living, this strategy might help you stretch your retirement savings further.

Final Thoughts: Plan Early for a Smooth Transition

The key to navigating health insurance before Medicare is planning ahead. Your best option will depend on your income, health status, and retirement goals. Whether it’s COBRA, ACA, private insurance, part-time work, or health-sharing plans, make sure you research and compare costs before making a decision.

Helpful Resources:

• COBRA Information - Learn more about COBRA continuation coverage and eligibility requirements: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra

• Affordable Care Act (ACA) Marketplace: Find out about ACA plans and check your eligibility for subsidies: https://www.healthcare.gov/see-plans/#/

• Private Health Insurance - Compare private insurance options: https://www.ehealthinsurance.com/ https://www.healthcare.com/

• Short-Term Health Insurance Plans: https://www.ehealthinsurance.com/

• Health Sharing Programs: https://www.medishare.com/ https://zionhealthshare.org/ https://chministries.org/

• International Health Insurance Options: https://www.cignaglobal.com/ https://www.internationalinsurance.com/

• Part-Time Jobs with Health Benefits: https://www.thepennyhoarder.com/make-money/side-gigs/part-time-jobs-with-health-insurance/
  

Watch Mike's video on this topic here!: