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Medicare is available to those 65 or older or those who are younger but disabled or have specific medical conditions like end-stage renal disease (ESRD), amyotrophic lateral sclerosis (ALS), or a severe and persistent disability. However, the majority of people retire before they qualify for Medicare.

Fortunately, early retirees have a host of options while waiting for Medicare to kick in. These include Medicaid, short-term health insurance, insurance through employment, COBRA or private marketplace plans — all of which can vary in cost. Generally, marketplace health insurance for seniors without Medicare costs an average of $970 for 60-year-olds, but this can change depending on the level of coverage.

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Key Takeaways

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The most affordable health insurance for retirees under 65 is Medicaid. However, eligibility is based on your income.

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For seniors aged 60, the average cost of health insurance on the marketplace is $1,025 per month. A cheaper low coverage plan, however, can start at around $500 per month.

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Health insurance options for early retirees include Medicaid, COBRA, short-term insurance and marketplace policies.

Marketplace Plans: Early Retirement Health Insurance Costs

Health insurance for retirees is typically more expensive, given that seniors have a higher need for care. While cheaper plans may be attractive, they may not offer the best maximum out-of-pocket costs (MOOP) or coverage.

Insurance plans have different tiers and your cost will vary according to what tier plan you have. If cost is your chief concern, review the average cost of health insurance below for different marketplace tiers. Generally, seniors can start with a Silver plan and review their preferred in-network physicians before upgrading.

Cheapest Marketplace Health Insurance Plans for Seniors
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Below Bronze plans are Catastrophic plans, which are only available in some areas and are limited to a certain population. Generally, catastrophic plans are only available to people under 30 years of age, but older adults can purchase them if they do not have any other choices that cost less than 8.09% of their monthly income.

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Having a low premium often results in high deductibles, which may not be ideal for a senior who needs to visit the doctor regularly. Instead, seniors may want to opt for a policy with a higher premium, lower deductible and better coverage. This way, cost-sharing can begin sooner, which benefits seniors who frequently need medical care.

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Early Retirement Health Insurance Options

Retiring early can come with some changes to the benefits you receive. While a senior’s Social Security benefits can be collected starting at the age of 62, Medicare benefits do not kick in until the age of 65.

This means seniors need to bridge the gap in health insurance until Medicare can apply. While it may be more affordable to wait, having health insurance while aged 62 to 65 is crucial to avoid hefty medical fees.

Fortunately, there are several ways to get health insurance for retirees under 65, including COBRA, short-term retirement insurance plans, Medicaid and marketplace plans.


Different Workplace Insurance

If your spouse is still working, you may be able to join their employer-sponsored health insurance plan. However, note that there may be cost implications, such as an increase in your spouse’s premiums. You may also get employer-sponsored insurance if you get another job after retirement.



Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), employers are required to offer the option to let retirees continue their health benefits for a limited time. However, eligibility depends on your circumstances, such as if you voluntarily or involuntarily lose your job, reduce your hours worked, switch jobs or lose a spouse. Those who qualify will have to pay the premium or up to 102% of the policy's cost.


Short-Term Insurance

A short-term insurance plan is another health insurance plan for retirees under 65. It replaces gaps in coverage for up to one year, although it can be extended. However, a short-term insurance plan does not provide comprehensive coverage and doesn’t provide long-term financial protection for most health needs. Not all individuals are eligible, as providers can deny an application based on your medical history.



Medicaid is an affordable health insurance option for low-income individuals. However, eligibility is based on your income and can vary from state to state. For instance, in Arizona, you must be 138% below the poverty level to qualify for Medicaid, while in the District of Columbia, the requirement is 215%. Make sure to check your state's Medicaid income eligibility limits.


Marketplace Plans

Seniors can get affordable health insurance through the Health Insurance Marketplace in their state. While there is typically an enrollment period, losing employer-based health insurance is a qualifying event that grants seniors a special enrollment period. Seniors may also qualify for a premium tax credit, depending on their eligibility.

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It is usually not possible to get Medicare at 62 years of age. If you retire earlier than age 65, you will have to wait until you reach the eligibility age. However, there are exceptions, such as if you are on Social Security Disability Insurance (SSDI) for at least two years or have ESRD or ALS.

Health Insurance Options Before & Until Medicare Starts

If alternative options aren’t a good fit, the private marketplace offers health insurance for seniors without Medicare. The Affordable Care Act (ACA) makes private marketplace plans easier and more affordable for qualifying seniors.

Through the application process, you can find out if you are eligible for Medicaid or qualify for premium tax credits. Premium tax credits can help you reduce your monthly premiums, and typically apply to households with incomes between 100% and 400% of the federal poverty level (FPL).

Generally, marketplace plans are a great option for seniors looking to bridge health insurance until Medicare starts. Unlike short-term insurance, you can enroll through the marketplace even if you have pre-existing health conditions. Keep in mind, however, that plans and eligibility can vary by state.

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Some employers may offer retiree health insurance to seniors and their spouses. While seniors with this benefit can still apply for any marketplace plan, note that this forfeits any subsidies and premium tax credits. If you drop your retiree benefits to opt for a marketplace plan, you will have to wait until open enrollment as you will not qualify for a special enrollment period.

Health Insurance for Seniors FAQ

Finding health insurance for retirees under 65 is crucial to remain protected. Review the commonly asked questions on how to bridge health insurance until Medicare.

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About Mark Fitzpatrick

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Mark Fitzpatrick is a senior content director at MoneyGeek with over five years of experience analyzing the insurance market, conducting original research and creating content that can be personalized for every buyer. He has been quoted on insurance topics in several publications, including CNBC, NBC News and Mashable.

Mark earned a master’s degree in Economics and International Relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his economics and insurance knowledge to bring transparency around financial topics and help others feel confident in their money moves.