Retiring Early + Facing a Coverage Gap? Health Insurance for Age 62 to 65

Retirement knows no official age – at least not generally speaking. In terms of benefits, however, there are some parameters:

  • 62 is the age at which you can start receiving Social Security retirement benefits (the amount is reduced until you reach full retirement at age 65).1
  • 65 is the age at which you become eligible for Medicare.2

It is with these numbers in mind that people often speak about “early retirement.”

So how do you pay for health insurance when you retire in the 62 to 65 age range (or if you retire even younger)? You’re not yet eligible for Medicare, which means you could experience a gap in healthcare benefits.

If you plan to retire before age 65, you’ll want to research your early retirement health insurance options and enroll in coverage to help pay for health care until you can begin Medicare.

Fortunately, there’s no shortage of health insurance options for retirees before they’re Medicare-eligible. We’ll discuss options based on how long you have until you can enroll.

At what age are you eligible for Medicare?

Medicare eligibility kicks in just before you turn 65. Typically, there is a 7-month initial enrollment period that begins 3 months before you turn 65, includes the month you turn 65, and ends 3 months after you turn 65.3 Calculate your eligibility and premium.

If you miss your initial enrollment period, you can sign up during the annual general enrollment period, which goes from January 1 through March 31, or you can see if you qualify for a special enrollment period.4

Visit to learn more about eligibility and getting started with Medicare.

Can you get Medicare at age 62?

Medicare eligibility begins around the time you turn 65. If you are 62, you may have to find another form of health insurance coverage until you qualify. You may be eligible to enroll in Medicare sooner, if you have a special condition or disability. If you have end-stage renal disease and meet specific eligibility criteria, you are Medicare-eligible at any age; you can learn more at

Calculate your eligibility and premium at

Looking at a gap in coverage? Continue reading to learn more about your health insurance options until you become eligible for Medicare, whether you have less than a year or a few years to go.

Health insurance for retirees with 1 year or less until Medicare

Even if you’ve only got a month or two before Medicare, going without any health insurance can be a bit of a gamble. It could mean dipping into your retirement savings to pay for unexpected healthcare expenses.

Insurance can help you mitigate some financial risk by providing benefits that help pay for medical expenses that arise from unforeseen illnesses and injuries.

1. Short-term medical health insurance

When you retire early, you may experience a brief coverage gap (the period between when your job-based health insurance or individual major medical plan ends and Medicare begins). During this time period, a short-term policy may be the right solution.

Short-term plans provide coverage for as few as 30 days and as many as 90 (in some states this changes to 364 days as soon as October 20186).

Short-term plans include a range of benefits that help pay for catastrophic medical events but don’t typically cover preventive care or pre-existing conditions (however, there are some plans on the market that include limited benefits for certain pre-existing conditions as well as some plans with limited preventive care benefits).

The limited nature of short-term health insurance policies is what helps to keep premiums lower than they would be for more comprehensive coverage. As with major medical insurance, the more robust the benefits you choose, the higher the premium you’ll pay, and vice versa.

As such, short-term plans can provide health insurance for retirees under 65 who want to save money until they have long-term coverage and need benefits for worst-case scenarios. However, you may want to gather quotes for short-term and major medical plans to determine which options are truly right for you.

Learn more about short-term plans

A quick glance at short-term medical

Policy Duration Limits Up to 90 days*
Year-Round Enrollment
Guaranteed Issue
ACA Minimum Essential Coverage
Subsidy Eligible
How Benefits Pay Out % paid to pthe rovider

* Policy duration limits lift in some states to 364 days starting October 2018

2. Hospital indemnity insurance

Hospital indemnity insurance is fixed-benefit indemnity coverage that can help with expenses related to hospitalization, surgery and critical illness before you gain access to Medicare. These standalone policies are separate from any other coverage you may have and provide specified, fixed-dollar amounts for covered hospital services and durations.

The benefit amount a hospital plan pays will match what is outlined in your policy, regardless of the actual cost of the medical care you receive. The amount may be per day, per week, per month, per visit or per event, depending on the benefit that applies.

For example, if you had a hospital indemnity policy that paid a daily intensive care benefit of $3,000 per day and was in intensive care for 2 days, then the benefit amount would be $6,000 ($3,000 per day x 2 days).

Hospital indemnity plans may also include benefits for additional services such as ambulance services, chemotherapy, and radiation as well as optional benefits for preventive care, X-rays and other services.

You’ll want to read plan descriptions to determine which benefits are included and which optional benefits you may like to add.

A quick glance at hospital indemnity

Policy Duration Limits 365
Year-Round Enrollment
Guaranteed Issue
ACA Minimum Essential Coverage
Subsidy Eligible
How Benefits Pay Out Fixed amount to insured

3. Short-term + hospital plan bundles

Looking for a way to obtain health insurance benefits that help pay for smaller and larger claims during early retirement? You can enroll in a bundled plan that includes both short-term health insurance and a hospital indemnity plan.

4. Major medical insurance

Major medical insurance is your most comprehensive health insurance option for early retirees. Major medical plans are considered minimum essential coverage under the Affordable Care Act (ACA), and their benefits cover the healthcare spectrum, from preventive care and doctor office visits to surgery and hospitalization.

Major medical plans must meet all ACA requirements such as the inclusion of the 10 essential health benefits categories and no-cost preventive care. They are guaranteed issue regardless of your health history, and they must cover pre-existing conditions. Furthermore, your rate can’t be based on health history or pre-existing conditions.

If you’re someone who has pre-existing conditions, needs a fair amount of medical care in a given year, and takes prescription drugs, you may want to consider major medical insurance.

Additionally, you may be eligible for subsidies to help lower your monthly major medical insurance premiums when you buy through or a state-based exchange.

A quick glance at major medical

Policy Duration Limits 365
Year-Round Enrollment *
Guaranteed Issue
ACA Minimum Essential Coverage
Subsidy Eligible
How Benefits Pay Out % paid to the provider

* Major medical insurance is available during the annual open enrollment period or during a special enrollment period if you experience a qualifying life event.

Learn more about major medical

4. Additional early retirement coverage options

You may have early retirement health insurance options in addition to the list above. They include but are not limited to:

COBRA – You may be eligible for COBRA continuation health coverage, which allows you to remain on your employer’s plan for a certain amount of time.

You may be required to pay up to 102% of the plan cost (this includes the amount you and your employer paid for coverage plus 2% for administrative costs).

Speak with your employer for details, or learn more about COBRA at the Department of Labor website.

Your spouse’s health insurance – If your partner has access to job-based health insurance, you may want to find out if you’re eligible to be added to the plan.

Medicaid – You may be eligible for low-cost coverage through Medicaid, but you will need to meet the eligibility criteria for your state. Learn more at

Health insurance for 1+ years until Medicare

If you’re a few years away from turning 65, you may want to seriously consider major medical insurance.

Although the Affordable Care Act’s tax penalty will no longer apply starting with coverage year 2019, major medical insurance remains the most comprehensive health insurance option and still must adhere to ACA guidelines (e.g., essential health benefits, preventive care, guaranteed issue).

When you buy a major medical plan through the Federal Market Place,  you may be eligible for income-based subsidies that can lower your monthly premium.

Estimate your subsidy using our health insurance calculator.

Supplemental coverage to help with out-of-pocket expenses

There are supplemental health insurance products available to help manage high health insurance deductibles. Often referred to as medical gap plans, supplemental plans are stand-alone policies that provide fixed-cash benefits when you experience a covered accident or illness.

Your supplemental plan benefits may be used to help with a variety of expenses including but not limited to your health insurance deductible, medical care your health insurance doesn’t cover (e.g., out-of-network ), household expenses, and more.

A quick glance at supplemental

Policy Duration Limits 365
Year-Round Enrollment
Guaranteed Issue
ACA Minimum Essential Coverage
Subsidy Eligible
How Benefits Pay Out Fixed amount to insured

Summary + next steps

What makes sense for someone else may not be the best solution for you. Which early retirement health insurance option you choose will depend largely on your personal situation, including factors such as how early you retire as well as your health history, current healthcare needs, and retirement budget.

We understand that health insurance can be confusing and overwhelming. NorthWest Benefits can help. Just get in touch with us for a personal evaluation for your health care needs. NorthWest Benefits Solutions.

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