Transparent method
The formula
Worked example
Example inputs
How to interpret the result
The bridge between an early retirement date and Medicare eligibility can span several years, and marketplace coverage, COBRA continuation and a spouse's employer plan carry meaningfully different costs and coverage tradeoffs during that stretch, so the option that looks cheapest month to month isn't automatically the one with the best actual coverage for the situation.
Before you rely on it
What to check
Compare marketplace, COBRA and any spouse-plan option side by side on both cost and actual coverage terms, not on premium cost alone.
The common error
Where people go wrong with early retirement health insurance calculator
Choosing a healthcare bridge option based on the lowest monthly premium alone. COBRA, marketplace and spouse-plan coverage can differ meaningfully in what they actually cover, and the cheapest option on paper isn't automatically the best fit for the actual coverage needed during the bridge years.
Sensitivity evidence
How current monthly premium changes the estimated healthcare bridge cost
| Current monthly premium | Estimated healthcare bridge cost | First-year bridge cost | Final-year bridge cost |
|---|---|---|---|
| $880 | $80,453 | $14,560 | $17,698 |
| $990 | $87,747 | $15,880 | $19,302 |
| $1,100worked example | $95,041 | $17,200 | $20,907 |
| $1,210 | $102,335 | $18,520 | $22,511 |
| $1,320 | $109,629 | $19,840 | $24,116 |
Every input, tested
Which input moves the estimated healthcare bridge cost most
| Input | Tested from | To | Estimated healthcare bridge cost at each end | Swing |
|---|---|---|---|---|
| Years until Medicare eligibility | 4.0 years | 6.0 years | $74,134 to $116,993 | $42,859 (45%) |
| Current monthly premium | $990 | $1,210 | $87,747 to $102,335 | $14,588 (15%) |
| Annual out-of-pocket spending | $3,600 | $4,400 | $92,831 to $97,251 | $4,421 (4.7%) |
| Healthcare inflation | 4.0% | 6.0% | $93,161 to $96,958 | $3,797 (4.0%) |
Two variables at once
Estimated healthcare bridge cost by current monthly premium and annual out-of-pocket spending
| Current monthly premium \ Annual out-of-pocket spending | $3,200 | $4,000 | $4,800 |
|---|---|---|---|
| $880 | $76,033 | $80,453 | $84,874 |
| $990 | $83,327 | $87,747 | $92,168 |
| $1,100 | $90,620 | $95,041 | $99,461 |
| $1,210 | $97,914 | $102,335 | $106,755 |
| $1,320 | $105,208 | $109,629 | $114,049 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Current monthly premium | $1,100 |
| Annual out-of-pocket spending | $4,000 |
| Healthcare inflation | 5.0% |
| Years until Medicare eligibility | 5.0 years |
| Estimated healthcare bridge cost | $95,041 |
| First-year bridge cost | $17,200 |
| Final-year bridge cost | $20,907 |
Where the inputs come from
Current monthly premium is what individual coverage would cost you, taken from a marketplace quote for your age and state, or your COBRA rate. Annual out-of-pocket spending covers deductibles, copays and prescriptions. Healthcare inflation is your assumption for premium increases, and years until Medicare eligibility is the gap from your retirement date to age 65. Check both marketplace quotes and COBRA, which lasts up to 18 months, and consider a spouse's employer plan.
Using the estimated healthcare bridge cost in a real decision
Premium subsidies on the marketplace depend on income, so a low taxable income in early retirement can cut the cost sharply, and that shapes which accounts you draw from.
When the result stops applying
Premiums and subsidy rules change with law and vary by state and age. Income-based subsidies can disappear at certain thresholds, so one large withdrawal can raise the cost. Plan quality differs: a cheaper plan may have a high deductible. Medicare starts at 65 regardless, and delaying enrollment can add penalties. The model uses a steady inflation rate.
What to compare it with
See the retirement healthcare cost calculator for costs after Medicare, and the long-term care page for later care. The FIRE and barista FIRE calculators show the target this cost adds to, and the Roth conversion and bracket-fill pages help manage income for subsidies.
People also ask
Frequently asked questions
How can I get health insurance before Medicare?
Options include the ACA marketplace, COBRA continuation for up to 18 months, a spouse's employer plan, or a part-time job that offers benefits.
Do marketplace subsidies depend on income?
Yes. Premium tax credits are based on modified adjusted gross income, so managing taxable income in early retirement can lower premiums.
When does Medicare start?
At 65. Enroll during your initial enrollment period around your 65th birthday, since late enrollment can bring permanent penalties.