Medicare 2026

Retiring Before 65? Here's How to Bridge the Gap Until Medicare Starts

Leaving work before Medicare age is a milestone — and a puzzle. Medicare based on age generally starts at 65 (earlier for people with a qualifying disability, End-Stage Renal Disease, or ALS), and your first chance to sign up usually begins three months before the month you turn 65. If you retire earlier, you'll need a plan to carry you to that point. The good news: several legitimate paths exist, and you can mix and match them as life changes.

Option 1: A Marketplace plan with possible savings

When retirement causes you to lose job-based coverage, HealthCare.gov treats that as a qualifying life event. You can apply in the Marketplace from 60 days before to 60 days after your separation date, and a single application tells you whether you qualify for a plan with premium tax credits and lower out-of-pocket costs, or for Medicaid. Those savings depend on income and household size.

One nuance that trips up early retirees: IRA and 401(k) withdrawals generally count as income on your Marketplace application. If you're planning to live on retirement account draws until Medicare starts, factor that in when you estimate your household income.

Marketplace coverage can carry you right up to the day Medicare begins — but it won't shut off on its own. You'll need to update your Marketplace application to end that coverage, and you can report your Medicare start date up to three months in advance so the transition is clean.

Option 2: COBRA continuation of your employer plan

COBRA lets you keep your former employer's group health coverage for a limited time — generally 18 months, and 36 months in certain situations. It typically applies only to employers with 20 or more employees. Because you keep the same network and benefits, COBRA can be a comfortable short-term bridge, especially if you're mid-treatment or want to finish the plan year with the same doctors.

Two cautions. First, COBRA is usually expensive, because you pay the full premium (the share your employer used to cover plus, in most cases, a small administrative fee). Second — and this is the big one — COBRA does not extend the time you have to sign up for Medicare. Medicare.gov tells people who have COBRA and haven't signed up for Medicare to enroll when they turn 65 to avoid gaps in coverage and a Part B late enrollment penalty.

There's also a timing rule worth knowing if you want to switch from COBRA to the Marketplace. You get a Marketplace Special Enrollment Period when COBRA runs out, but you can't simply drop COBRA mid-term and jump to a Marketplace plan — that only works during Marketplace Open Enrollment, when you can drop COBRA even if it isn't ending.

Option 3: Retiree health coverage from a former employer

Some employers offer retiree health benefits that continue past your last day of work. If that's on the table, read the fine print carefully. If you're actually enrolled in retiree coverage, you cannot get premium tax credits on a Marketplace plan. (Someone who is eligible for retiree coverage but not enrolled may still qualify.) And voluntarily dropping retiree coverage does not create a Marketplace Special Enrollment Period, so you'd generally have to wait for Marketplace Open Enrollment to switch.

Option 4: Medicaid, if you qualify

Your Marketplace application also checks whether anyone in your household qualifies for Medicaid, which is based on income and household size. Early retirement often brings income down, so it's worth submitting an application even if you're unsure.

Planning ahead for Medicare at 65

While you're bridging the gap, start reading up on what's coming. Medicare has moving parts — Part A (hospital), Part B (medical), Part D (prescription drugs), and private options like Medicare Advantage and Medigap (Medicare Supplement Insurance).

A neutral way to think about the two main coverage paths: Original Medicare with a stand-alone Part D plan, often paired with a Medigap policy, tends to offer broad provider access and predictable cost-sharing through Medigap, but you pay separate premiums for the pieces. Medicare Advantage bundles Part A, Part B, and usually Part D into one plan, often with extra benefits, but uses plan networks and rules. Neither is "better" — the right fit depends on your doctors, your medications, your budget, and how you like to use coverage. Take the time to compare.

A few program-level facts that will apply when you join: In 2027, Part D plans cannot charge a deductible higher than $700, and there's an annual out-of-pocket cap of $2,400 for covered drugs (it's $2,100 in 2026). The Part D base beneficiary premium used in the late-enrollment penalty is $41.33 for 2027; actual plan premiums are set plan by plan. Annual Enrollment for 2027 coverage runs October 15 – December 7, 2026, with choices taking effect January 1, 2027. Social Security announced a 3.6% cost-of-living adjustment for benefits payable beginning January 2027.

The 2027 Part B standard premium and deductible, and the 2027 IRMAA income brackets, have not been announced. CMS typically releases those figures in the fall.

A note for people with Medicaid or Extra Help

If you have Medicaid or qualify for Extra Help with Part D costs, you have a monthly Special Enrollment Period to move to Original Medicare with a stand-alone Part D plan, or to switch stand-alone Part D plans. Full-benefit dual-eligible individuals can join an integrated Dual Eligible Special Needs Plan (D-SNP) in any month.

Where to learn more

For official, plain-English details on Medicare rules, enrollment windows, and plan comparisons, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227). For Marketplace coverage questions, HealthCare.gov is the federal source. Giving yourself a few months to plan the handoff — from employer plan, COBRA, Marketplace, or retiree coverage into Medicare — is the simplest way to avoid gaps and penalties.