COBRA, the ACA, and Bridging to Medicare
Your options for health coverage if you stop working before 65 — and which usually costs less.
COBRA: keep your job's plan, pay the full price
COBRA lets you keep your employer health plan for up to 18 months after leaving. The catch: you pay the full premium plus a 2% fee — often $600–$2,000+/month — because your employer no longer chips in.
It's worth it short-term if you're mid-treatment, want to keep your doctors, or haven't hit your deductible yet. Otherwise, compare it to the ACA before enrolling — you have 60 days to decide.
The ACA marketplace: often much cheaper
On HealthCare.gov, premium subsidies are based on your expected income. Many early retirees with modest taxable income pay far less than COBRA — sometimes close to zero. Losing job coverage triggers a special enrollment period, so you don't have to wait.
Bridging to Medicare at 65
Medicare starts at 65. Sign up during your Initial Enrollment Period (the 7 months around your 65th birthday) to avoid lifelong late penalties.
- ◆Part A (hospital) is usually free; Part B (doctors) has a monthly premium.
- ◆Decide between Original Medicare + a Medigap supplement, or a Medicare Advantage plan.
- ◆If you have limited income, look into Medicare Savings Programs and Extra Help for drug costs.