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Bridging the Gap Between Retirement and Medicare

Bridging the Gap Between Retirement and Medicare

September 25, 2023

If you retire before the age of 65, how can you replace employer-based health insurance coverage?

Many employers do not cover employees after they retire. This means that if you retire before the age of 65, you will most likely be responsible for the full cost of your premiums until you reach the age of 65 and become Medicare-eligible. Medicare is a federal health insurance program primarily designed for individuals aged 65 and older, although it can also cover certain younger individuals with disabilities.

Below is a list of what our financial advisors in Appleton think you need to know about the gap between retirement and Medicare.

Medicare Eligibility and Retirement Age

  1. Medicare Eligibility Age: The standard age of eligibility for Medicare is 65. This means that most people become eligible for Medicare benefits on the first day of the month in which they turn 65.
  1. Medicare Enrollment: It's important to enroll in Medicare when you become eligible to avoid late enrollment penalties. You can generally enroll during the Initial Enrollment Period, which includes the three months before your 65th birthday, the month of your birthday, and the three months after.
  1. Retirement Age: Many people choose to retire before they reach the age of 65. The exact retirement age varies from person to person and is often determined by individual circumstances, financial readiness, and personal preferences. Some retire as early as their 50s, while others work past age 65.
  1. Gap in Coverage: The gap between retirement and Medicare coverage occurs when someone retires before turning 65. If you retire before reaching the Medicare eligibility age, you will need to find alternative health insurance coverage until you become eligible for Medicare.

Options for Coverage 

During the gap period, you have several options for health insurance coverage:

  1. Employer-Sponsored Coverage: If your employer offers health insurance to retirees, you may be able to continue your employer-sponsored coverage after retiring. You will need to check with your employer to see if this is an option and understand the cost involved.
  1. COBRA: The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue your employer's health insurance plan for a limited period (usually up to 18 months) after leaving your job. However, you will be responsible for the full premium, which can be expensive.
  1. Marketplace Plans: You can purchase health insurance through the Health Insurance Marketplace (also known as the Exchange) established under the Affordable Care Act. Depending on your income and circumstances, you may qualify for subsidies to help with premium costs.
  1. Medicaid: If your income is low, you may be eligible for Medicaid, a state and federally-funded health insurance program. Eligibility rules vary by state.

To navigate the gap between retirement and Medicare, it's essential to plan ahead and explore your health insurance options. Consider your unique circumstances, including your retirement date, financial situation, and health needs, and consult with a benefits advisor or a Medicare specialist to make informed decisions about your health insurance coverage during this transition period. If you have any additional questions, contact us today!


Hey there! Thanks for stopping by our blog. A quick heads-up: the information here is more like friendly tips than personalized financial advice. Investing can be a bit of a wild ride, and what worked before might not be the golden ticket for the future. So, before making any major money moves, it's always a good idea to have a friendly chat with a financial professional. We're all about providing insights, not making promises. Your unique financial journey is key, and we're delighted to have you on board for the journey!