How to Find Affordable Health Insurance for Retirees Under 65

Early retirees under the age of 65 have a variety of health insurance options to choose from while waiting for Medicare to kick in. These include Medicaid, short-term health insurance, insurance through employment, COBRA and private marketplace plans — all of which can vary in cost. The average marketplace health insurance plan without Medicare costs about $946 for a Bronze plan for 60-year-olds, but this can change depending on the desired coverage level.

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) or amyotrophic lateral sclerosis (ALS). However, most people retire before they qualify for Medicare, creating a need to bridge the coverage gap.

Health insurance for retirees is typically more expensive, given that older adults generally require more frequent care. While lower premium plans may be attractive, they may not offer the best maximum out-of-pocket costs (MOOP) or coverage.

Insurance plans are categorized into metal tiers, and your premiums will vary accordingly. If rates are your chief concern, review the average cost of health insurance for a typical 60-year-old in the table below to compare metal tiers. Many consumers prefer to start with a Silver plan and are able to review its preferred in-network physicians before upgrading, if necessary.

Note that Catastrophic plans are only available in some areas and are limited to a specific population. Generally, Catastrophic plans are only available to people under 30. However, older adults can purchase them if they do not have any other choices that cost less than 8.09% of their monthly income.

For a typical 60-year-old, the most inexpensive insurance provider in the Bronze tier, excluding eligibility-restricted Catastrophic plans, is Oscar, at an average monthly rate of $736.

In contrast, the top-tier Platinum plan by Blue Cross Blue Shield offers an average premium of $1,996 monthly, a substantial increase in cost that comes with significantly lower out-of-pocket risks.

While lower premiums can be appealing, they often mean higher total costs when seeking care due to higher maximum out-of-pocket amounts, potentially discouraging you from seeking the care you need.

The table below displays the cheapest average health providers nationwide and their premiums, sorted by metal tier:

Health insurance plan costs differ vastly by location and chosen coverage levels. The three least expensive Silver health insurance plans across all states for a typical 60-year-old are:

• Valley Health Plan: $424 per month
• WellSense Health Plan: $691 per month
• Blue Cross Blue Shield: $687 per month

Actual rates for health insurance plans are subject to change due to specific factors such as the region where you live, whether you use tobacco, your income and your household size. Remember to balance monthly premiums against potential out-of-pocket costs. The most cost-effective plan should align with both your health care needs and financial situation.

The table below highlights the premiums and maximum out-of-pocket costs of each state's cheapest health insurance plans for a typical 60-year-old adult:

If alternative options aren’t a good fit, the marketplace offers health insurance for early retirees and is an excellent option for seniors looking to bridge health insurance until Medicare starts. The Affordable Care Act (ACA) makes marketplace plans more accessible and affordable for qualifying seniors.

Marketplace insurance plans provide various coverage levels and premiums for retirees under 65. The ACA has capped rates at no more than three times the cost for a 21-year-old to keep insurance costs in check for older individuals.

Through the Health Insurance Marketplace application process, you can determine 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).

Additional savings are available through cost-sharing reductions for those with incomes between 100% and 250% of the federal poverty level and on a Silver plan, lowering deductibles, copayments and out-of-pocket maximums.

Unlike short-term insurance, you can enroll through the marketplace even with pre-existing health conditions. Remember that plans and eligibility can vary by state, and enrollment is typically only available during the annual open enrollment period. Qualifying life events like retirement can trigger a special enrollment period.

Finding health insurance for retirees under 65 will help you stay protected. Review our answers to commonly asked questions on bridging the gap between retirement and Medicare eligibility.