Health Insurance Options From 55 to 65: Bridging the Medicare Gap

The decade before Medicare is often called the "healthcare gap" - and for good reason. You're at an age when health insurance is most expensive, but you don't yet qualify for Medicare.

• **Peak premium years:** Insurance companies charge 3x more for 64-year-olds than 21-year-olds
• **More health needs:** Chronic conditions often emerge in this decade
• **No Medicare safety net:** You must find and pay for coverage yourself
• **Early retirement risk:** Healthcare costs can derail retirement plans
• **10-year problem:** This isn't a short gap - it's a full decade of high costs

Here are all the paths to coverage before Medicare:

For most early retirees, the ACA marketplace offers the best combination of comprehensive coverage and affordability:

• **Subsidies available:** Premium tax credits if income is 100-400% of Federal Poverty Level
• **Enhanced subsidies:** Through 2025, even higher incomes may qualify for some help
• **No health questions:** Cannot be denied or charged more for pre-existing conditions
• **Essential benefits covered:** All plans cover prescriptions, mental health, preventive care
• **Silver plan bonus:** Cost-sharing reductions if income under 250% FPL

COBRA lets you keep your employer plan, but at full cost:

• **Same coverage:** Identical plan, doctors, and benefits you had while employed
• **Full premium:** You pay 100% of cost (what you paid + what employer paid) + 2% admin fee
• **18-month limit:** Coverage lasts 18 months (36 months in some cases like disability)
• **Best for short gaps:** Makes sense if starting new job soon or mid-treatment
• **Retroactive option:** You have 60 days to decide, and can elect retroactively if needed

If your spouse is still working with employer health benefits, this is often the best deal:

• **Employer subsidy continues:** Employer typically pays 70-80% of premium
• **Your cost:** Usually $200-$600/month to add spouse to plan
• **Good coverage:** Employer plans tend to have better networks and benefits
• **Stagger retirement:** Some couples plan for one spouse to work until 65 for benefits
• **Check open enrollment:** Adding spouse may require waiting for enrollment period

These alternatives work for specific situations:

• **Part-time job with benefits:** Costco, Starbucks, UPS, and others offer benefits for part-timers
• **Health sharing ministries:** Faith-based cost-sharing (Medishare, Samaritan, CHM) - NOT insurance
• **Short-term health plans:** 3-12 month policies, can deny for pre-existing conditions
• **Professional associations:** Some offer group rates (freelancers, AARP)
• **Direct primary care:** Monthly fee to doctor + catastrophic coverage for major events

How healthcare costs typically increase as you approach 65: