Health insurance cost if you retire early at 55, 60, or 62
Want to stop working before 65? Then you need a plan for health insurance. Medicare does not start until age 65. Until then, you pay for your own coverage. This page shows what that costs and why your age matters so much.
See your year-by-year cost to Medicare →
How much is health insurance if you retire early?
The cost depends on a few things. There is no single price for everyone. But the way it works is simple to follow.
Before Medicare starts at 65, early retirees have two main choices. One is COBRA. COBRA lets you keep your old job plan for up to 18 months. The other is an ACA Marketplace plan. People also call this Obamacare. You can buy a Marketplace plan in any state and keep it until age 65.
With COBRA, you pay the full plan price plus a small fee. Your old boss no longer helps. With a Marketplace plan, you may get help from the government to lower your bill. That help is called a subsidy. A subsidy can cap your premium at a share of your income. COBRA has no such cap.
The big idea: a subsidized Marketplace plan can cap what you pay based on your income, while COBRA charges the full plan price no matter what you earn.
Why age matters (premiums rise with age)
ACA Marketplace prices are age-rated. That means older people pay more for the same plan. The rule lets a plan charge an older adult up to 3 times what a 21-year-old pays. The price climbs a little each year of age. It keeps rising until it hits that 3-to-1 cap around age 64.
So your base premium at 62 is higher than your base premium at 55, even for the same plan in the same place. This is true before any subsidy is added. It is also why two people on the same plan in the same town can pay very different prices. The only thing that changed is their age.
Age-rating matters most for early retirees because you are in the upper part of the age band. Each year you wait to leave work, your base price for the same plan creeps up a bit. Then it stops climbing once you reach 65 and move to Medicare.
Because Marketplace premiums are age-rated, a 64-year-old can be charged up to three times the premium of a 21-year-old for the very same plan.
Retiring at 55
Retire at 55 and you have about 10 years to cover before Medicare. That is the longest bridge of the three ages here. Your base premium starts lower than it will at 60 or 62, because you are younger. But you pay for many more years. Those years also include your early 60s, when age-rated prices are at their highest. So the total cost over the whole bridge can be large.
Retiring at 60
Retire at 60 and you have about 5 years to cover. Your base premium is higher than at 55, since you are older. But you pay for half as many years. This is the middle path. The total cost sits between the 55 case and the 62 case.
Retiring at 62
Retire at 62 and you have about 3 years to cover. Your base premium is the highest of the three, because you are closest to the 3-to-1 age cap. But you pay for the fewest years. Many people pair this with starting Social Security at 62, which adds income. More income can change how much help you get (see the next section).
How subsidies change the price
A Marketplace subsidy is based on your income for the year. The lower your income, the more help you can get. A subsidy can cap your premium at a share of your income. That can turn a scary base price into a number you can afford.
In 2026, the rules changed. The extra help from past years ended at the end of 2025. So 2026 uses the original sliding scale. The 400%-of-poverty income "cliff" is back. If your income goes over that line, you get no help at all. One dollar over can cost you thousands.
Here is the good news for early retirees. You often control your taxable income. You can time when you pull money from an IRA or 401(k). You can time when you sell investments. By keeping your income under the cliff, you may keep your subsidy. Workers with a steady paycheck do not have this much control. This is a key planning lever.
How many years until Medicare?
Medicare starts at age 65. So the number of years you must cover depends on how young you retire. Retire younger and you bridge more years. The table below shows the idea.
More years to cover if you retire younger
| Retire age | Years to cover until Medicare |
|---|---|
| Retire at 55 | ~10 years to Medicare |
| Retire at 60 | ~5 years |
| Retire at 62 | ~3 years |
So retiring younger has two effects at once. You face more years of premiums, and your premiums rise each year as you age. That is why a personal estimate matters so much.
The real number depends on your state, your county, your age, your household size, and your income. The only way to see your true cost is to run the numbers for your own case.
See your year-by-year cost to Medicare →
Related guides
- Is COBRA worth it?
- COBRA vs Obamacare: which is cheaper?
- The 2026 ACA subsidy cliff explained
- How CobraCalc works
- COBRA vs Marketplace FAQ
This is an estimate to help you plan, not insurance or tax advice. See the disclaimer.