8 Health Care Options for Early Retirees

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Early retirement is the dream of many people – after all, the sooner you retire, the sooner you can start enjoying a life of freedom and leisure.

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Still, retirement comes with quite a few costs, including health care. If you wait to retire at age 65, you will usually be eligible for Medicare. However, if you’re thinking of retiring before then, you’ll need to consider other health care options. Otherwise, you may find yourself facing huge medical debt in your later years.

According to Andy Hill, host of the popular lifestyle and finance podcast/YouTube channel, Married Kids and Money, there are several health insurance options available to early retirees. Before you take the plunge and retire, here are his suggestions for your next move.

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1. Market health insurance

You can buy a health insurance plan from the Health Insurance Marketplace, a service that helps people find affordable health insurance plans. While you will need to shop around and find a policy that fits your needs and budget, it can be an effective way to get the coverage you need at a reasonable price.

Be aware that Marketplace plans sometimes have high deductibles or other out-of-pocket costs, much of which is determined by your income and household size. If you plan to live on a fixed or low income during retirement, you may be eligible for a plan with premium tax credits or savings opportunities. In other words, you can get health insurance at a very low cost.

When shopping for health insurance, be sure to consider your current health status as well as any health problems that run in your family. If you can afford it, it may be worth choosing a more expensive plan with lower deductibles and co-pays.

2. Private health insurance plan

If you make too much money or don’t like any of the Marketplace options available, you can opt for a private health insurance policy instead. You can compare several private insurance plans to see how much they cost and what they cover. Just remember that private health insurance providers typically won’t offer premium tax credits — meaning you could end up spending more money on a policy than if you chose one on the Marketplace.

3. Partner’s Health Care Plan

Does your partner or spouse have health insurance? If so, you may be able to opt-in to their policy and get your coverage that way.

You will need to check with your partner what their policy covers and whether they can add another beneficiary or policyholder. Depending on their plan, you may only be able to enroll at certain times of the year, so keep that in mind.


The Consolidated Budget Reconciliation Act, or COBRA, allows you to keep your employer-based health insurance for a certain period of time after you leave your job — usually about 18 months. However, there are certain eligibility requirements and limitations. For example, you will usually have to pay the full premium plus administration fees each month. You will also need to prove that you lost your job due to a qualifying event, such as a sudden layoff or reduction in work hours.

COBRA is usually best as a short-term or temporary solution. If you’re considering early retirement and are eligible for COBRA, you’ll still need to consider other long-term options to see you through your retirement years.

5. Barista FIRE (part-time employment)

FIRE stands for “Financial Independence, Retire Early.” But when health insurance is an issue, you might want to consider what Hill called “Barista FIRE.”

Barista FIRE is essentially a hybrid between real FIRE and full-time employment. With it, you’re still working part-time, potentially enough to get a subsidized health insurance plan through your employer.

Working part-time has the added benefit of giving you extra income without the heavy workload. Instead of having to work 9-5 work weeks, you can work fewer hours and still have time to enjoy partial early retirement. You can also reduce the amount you withdraw from your retirement savings. Plus, if you do it until you turn 65, you can even qualify for Medicare.

Not every employer offers health insurance to part-time employees, so you’ll need to check your options.

6. Health Sharing Plan

With a health sharing plan, you can get health coverage for the things you actually need and use. These plans are usually less expensive than private health insurance policies, making them another solid option for early retirees.

However, health sharing plans are not health insurance in the same way as most of the other options on this list. In one, a group of people pool their money to help each other cover their medical expenses. Most of these plans only cover essential and catastrophic treatments. You’ll need to check with the specific plan how it works and any restrictions or eligibility requirements it may have. You’ll also have to put a certain amount of your own money into the plan before you get coverage.

7. Employer-sponsored health insurance

Some companies will offer continued health coverage or pay a portion of your monthly premium after you retire. If your current employer offers health insurance, see if you can keep coverage after you leave your job.

Of course, certain limitations and restrictions will apply. Additionally, this benefit is primarily designed to supplement your other health insurance, such as Medicare. Carefully review your employer’s policy and consider whether this option works for you and your family.

8. Medicaid

Medicaid offers affordable health insurance to eligible Americans, including low-income households, the elderly, and pregnant women. Unlike Medicare, Medicaid is generally available to people under the age of 65 — provided they meet income limits and other criteria. Although it is a federal program, Medicaid is offered at the state level. This means your coverage options will likely vary depending on where you live.

Bottom row

After all, you can still get health insurance if you retire early. Your options may include Medicaid, Marketplace plans, health sharing plans, COBRA, and going into your spouse’s policy.

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Having the right health insurance plan now can potentially save you financially in the future. That’s why it’s important to weigh your options carefully when choosing one. If all else fails, or if you’re not completely set on any plan, you might consider working part-time for a company that offers a subsidized policy.

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This article originally appeared on GOBankingRates.com: Marriage Kids and Money Show: 8 Healthcare Options for Early Retirees

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