June 8, 2023

Health Insurance For Early Retirement - Here Are 4 Options

Published May 8, 2023, 8:40 p.m. by Bethany

Health insurance for early retirement can be a challenge. You may not have the same health insurance options you have now. You may need to find a new policy, or change your current policy. You may also need to find a new provider.

There are four options for health insurance for early retirement.

1. Medicare. Medicare is a government program that provides health insurance for people aged 65 or older. Medicare may be the best option for you if you have health insurance through your job. You may not need to change your policy if you have Medicare.

2. Medicaid. Medicaid is a government program that provides health insurance for people who are low income. You may need to change your policy if you have Medicaid.

3. Private health insurance. If you don't have health insurance through your job, you may need to find private health insurance. You may be able to find private health insurance through a company that offers health insurance, or through a website.

4. A health savings account (HSA). A health savings account is a account that you can use to pay for medical expenses. You can use a HSA to pay for health insurance, or for other medical expenses.

You may also like to read about:

in this video i'm going to share four

options if you need health insurance for

early retirement

let's get started


hey there this is patrick king with

prana wealth on this channel we help you

build your wealth faster so that you can

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sooner so if you're new here please

consider subscribing

in my last video i discussed four

factors to consider before retiring at

age 60.

one of those factors is funding your

health insurance coverage

before medicare kicks in at age 65.

this is often the determining factor in

making the early retirement decision

for most people can you bridge the

health insurance gap

until you're 65. in today's video i want

to share four options if you need health


for early retirement number one

cobra continuation of benefits if your

employer has more than 20 employees

you have the option of continuing your

coverage through cobra

under the consolidated omnibus budget

reconciliation act

aka cobra you can continue to be covered

under the same

group health insurance plan you have

through work

unfortunately you will have to pay the

entire premium yourself

plus an administration fee of up to two


cobra coverage is limited to 18 months

so if you retire before

age 63 and a half you'll need to

eventually find other coverage

under normal circumstances you would

have 60 days after your separation from

service to elect

to take cobra benefits however thanks to


you now have until 60 days after the

covid 19 national emergency

is declared to be over at the time i'm

recording this video

the state of emergency is still in

effect however

be sure to confirm this with your

benefits administrator

while the cobra option is convenient you

get to keep the same plan and benefits

it could be awfully expensive the kaiser

family foundation estimated that the

average annual premium

for employer-sponsored health insurance

coverage for a family

was nearly twenty thousand dollars in


that's a pretty big price tag especially

if those funds are decreasing your

retirement savings

early on number two leveraging cobra


your hsa if you have a health savings


or hsa there is a wrinkle with cobra

that can work in your favor

insurance premiums are not normally

considered qualified medical expenses

for your hsa

however there's an exception when it

comes to cobra continuation of coverage

that's right you can pay for cobra using

your hsa

health savings accounts are an often

overlooked opportunity

if you're creating a plan to retire

early and have access to an hsa

this could be a fantastic retirement


front loading your hsa with tax-free

funds to pay

cobra premiums would be a great way to

bridge the gap until age 65.

if you're still working it makes sense

to set up a health savings account

and start contributing as soon as

possible hsas were created to be used


high deductible health plans for 2021

the irs defines a high deductible health


as any plan with a deductible of at

least fourteen hundred dollars for an


and twenty eight hundred dollars for a

family hsas allow you to save and invest

money to be used for medical expenses

including deductibles coinsurance


vision expenses and dental care unused

balances are carried over to the

following year

the funds never expire and they can be

passed on to a surviving beneficiary

in addition hsas are triple tax


meaning that they are funded with

pre-tax dollars they grow

tax-free and withdrawals are not taxed

at all

if they are spent on qualified medical


moreover once you turn 65 and qualify

for medicare

these plans simply don't go away you can

use them to pay medicare premiums

long-term care insurance premiums or

just use it as a retirement account just

as you use

an ira number three the affordable care

act marketplace

another health insurance option for

early retirement is the affordable care

act marketplace

the aca provides four levels of plans

which correspond

to the percentage split of health care

costs between the plan

and the individual it's important to

point out however that many early

retirees accustomed to group health

insurance experience

some level of sticker shock over policy


as you would expect the greater the

coverage the higher the cost

bronze plans have the lowest monthly

premium while platinum plans have the


bronze plans are the most cost effective

if you're relatively healthy and have

low medical care or

prescription drug costs gold and

platinum plans will make the most sense

if you tend to have high

annual medical expenses number four

private insurance if you decide not to

use the aca marketplace

private insurance is still available

while the loss of employment is often

considered a qualifying life event

you may need to sign up during the open

enrollment period depending on your


retiring early would likely enable you

to sign up outside of the open

enrollment period but different plans

have different requirements

similar to the aca marketplace choosing

the right plan means

taking a thoughtful look at your medical

needs and finding the best options for


it may be helpful to use an agent to

sort through the different plans

you can find one using the national

association for health underwriter's

find an agent tool i'll post the link in

the show notes

so retiring after you become eligible

for medicare is a great strategy

however if your plans unexpectedly

change there are still options available

if you need help figuring out health

insurance for early retirement then

visit us at pranawealth.com to see if

we're potentially a good fit

we do still have the capacity to take on

new clients

as a fee only financial advisor in

atlanta we can and do

work virtually with clients all across

the u.s

we're here to help you whenever you're

ready hey if you found this video

helpful please help me grow my channel

by liking this video and subscribing to

my channel

thanks so much for watching and i'll see

you soon



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