How to Get Health Insurance If You Retire at 62

Retiring at age 62 brings a significant life change, and securing continuous health insurance is a primary concern during this transition. Individuals leaving the workforce before age 65 face a unique challenge, as Medicare eligibility typically begins at 65. Navigating the landscape of health coverage options during this pre-Medicare period requires careful consideration. Understanding the available pathways ensures a seamless continuation of essential health benefits, providing peace of mind as one embarks on retirement.

Understanding Your Health Insurance Options

Retiring at age 62 means individuals are not yet eligible for Medicare, which typically begins at age 65. This three-year gap necessitates exploring other avenues to maintain health coverage. Evaluating health insurance plans involves assessing key factors to ensure the chosen option aligns with individual needs and financial capacity.

When considering any health plan, examine the monthly premiums. Understand the deductible, copayments for doctor visits, and coinsurance, as these out-of-pocket expenses influence the total cost of care. Consider the plan’s network, whether it is a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO). Check the plan’s formulary to confirm coverage for necessary prescription medications.

Employer-Sponsored and Individual Marketplace Plans

For those retiring at 62, employer-sponsored options and plans obtained through the Affordable Care Act (ACA) Marketplace are primary health insurance pathways. Each presents distinct features and considerations for maintaining coverage.

Employer-Sponsored Coverage

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows eligible individuals to temporarily extend their group health benefits from a former employer. This option typically applies to employers with 20 or more employees.

COBRA coverage lasts for 18 months for the employee following job loss or reduction in hours. Dependents may be eligible for up to 36 months of coverage under qualifying events. Individuals electing COBRA are responsible for paying the full premium, including both the employee’s and employer’s share, plus an administrative fee.

Some employers, especially larger organizations, may offer their own retiree health benefits. These plans vary widely as they are offered at the employer’s discretion. Retirees should review the plan’s Summary Plan Description (SPD) to understand the benefit levels, cost of coverage, deductibles, and any limitations. Employers can typically change or terminate these benefits at any time, unless a specific promise has been made.

Individual Health Insurance Marketplace (ACA)

The Affordable Care Act (ACA) Marketplace, through Healthcare.gov or state marketplaces, provides a platform to find individual health insurance plans. Losing job-based health coverage due to retirement is considered a qualifying life event, triggering a Special Enrollment Period (SEP). This SEP allows enrollment outside the annual Open Enrollment Period, typically providing a 60-day window to select coverage.

Marketplace plans are categorized into metal tiers: Bronze, Silver, Gold, and Platinum. These tiers indicate the percentage of healthcare costs the plan is expected to cover, with Bronze plans having lower premiums and higher out-of-pocket costs, while Platinum plans have higher premiums and lower out-of-pocket costs. All plans offered through the Marketplace must cover ten essential health benefits, regardless of their metal level.

Financial assistance is available through the Marketplace. Premium tax credits can lower monthly premium payments, with eligibility based on household income relative to the Federal Poverty Level (FPL). For 2025, there is no maximum income limit for eligibility. Cost-sharing reductions (CSRs) lower deductibles, copayments, and out-of-pocket maximums. To qualify for CSRs, individuals must have an income between 100% and 250% of the FPL and enroll in a Silver-level plan.

The enrollment process involves creating an account on Healthcare.gov or a state marketplace, providing income and household information, and selecting a plan. Assistance is available online, by phone, or through certified enrollment partners.

Alternative Coverage Avenues

Beyond COBRA and Marketplace plans, other health insurance options are available for individuals retiring at 62. These alternatives often come with specific limitations or eligibility criteria.

Joining a spouse’s employer-sponsored health plan is a common alternative. If a spouse is still working and has employer-provided health insurance, the retiring individual may enroll. Loss of job-based coverage due to retirement is typically a qualifying life event, allowing enrollment outside the usual open enrollment period for the spouse’s plan. This option can be cost-effective, as employers often subsidize a portion of the premiums for active employees and their covered family members.

Short-term health insurance plans offer another avenue. These plans have lower premiums but provide limited benefits compared to comprehensive health insurance. They often do not cover pre-existing conditions, mental health services, or prescription drugs, and are not considered minimum essential coverage under the ACA. Short-term plans provide coverage for a few months up to just under a year. They are intended as a stopgap measure for unexpected medical needs rather than comprehensive long-term health solutions.

Niche options may be found through professional associations, unions, or community programs. These vary significantly by location and group affiliation. While not universally available, exploring such programs may uncover unique coverage opportunities.

Planning for Your Medicare Transition

As individuals approach age 65, planning for the transition to Medicare becomes an important aspect of health insurance strategy. Medicare is the federal health insurance program for people 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease. Understanding its components and enrollment periods helps avoid gaps in coverage or potential penalties.

Medicare eligibility generally requires a person to be age 65 or older, a U.S. citizen or legal resident for at least five years, and to have paid Medicare taxes through employment for typically 10 years or 40 quarters. The Initial Enrollment Period (IEP) for Medicare begins three months before an individual’s 65th birthday, includes the birth month, and extends for three more months, totaling seven months. Enrolling during this period helps avoid potential late enrollment penalties for Part B and Part D.

Medicare consists of several parts. Medicare Part A, or Hospital Insurance, primarily covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. Medicare Part B, or Medical Insurance, covers certain doctors’ services, outpatient care, medical supplies, and preventive services. Medicare Part C, known as Medicare Advantage, is an alternative to Original Medicare (Parts A and B) offered by private companies approved by Medicare, often including Part D and additional benefits. Medicare Part D, or Prescription Drug Coverage, helps cover the cost of prescription drugs and is offered by private insurance companies.

Many individuals choose to supplement Original Medicare with a Medigap policy, also known as Medicare Supplement Insurance. Medigap plans help cover out-of-pocket costs that Original Medicare does not, such as deductibles, copayments, and coinsurance. The best time to enroll in a Medigap policy without medical underwriting is during the Medigap Open Enrollment Period, which begins the month an individual turns 65 and is enrolled in Medicare Part B, lasting for six months.

Coordination between existing coverage, such as COBRA or employer retiree plans, and Medicare is a critical consideration. If still covered by an employer plan when becoming Medicare eligible, it is important to understand how that plan coordinates with Medicare to determine primary and secondary payers. Failing to enroll in Medicare Part B or Part D when first eligible, if not covered by other creditable coverage, can result in permanent late enrollment penalties. Individuals should consult their benefits administrator to understand how their specific retiree or COBRA plan works with Medicare.