Retiring before 65 in Florida: covering the years until Medicare

The gap between your last job and Medicare

When you leave a job, the health plan that came with it usually ends with it. From then until your 65th birthday you have a few paths: COBRA from your old employer, a plan through a working spouse, an ACA Marketplace plan, or a fixed indemnity plan, which pays set amounts and is not full health insurance.

Most early retirees end up comparing COBRA and the Marketplace. Here is how they differ.

COBRA or a Marketplace plan

COBRA lets you keep your old job plan, usually for up to 18 months. You keep the same doctors and the same deductible you've already paid toward this year. The catch is cost. Your employer stops paying its share, so you pay the full premium, often plus a small fee. There is no tax credit for COBRA.

A Marketplace plan is a new plan, with a new deductible and network. But it may come with a tax credit based on your income, and income often drops a lot in retirement.

Timing is the trap. Losing job coverage gives you a Special Enrollment Period, usually 60 days, and you can pick a Marketplace plan even if COBRA was offered. If you choose COBRA and later drop it on purpose or stop paying, that is not a qualifying event. You would wait for Open Enrollment, November 1 to January 15. COBRA running out at the end of its term does count. Compare both before your 60 days are up.

Planning your income around the 400% line

Early retirees have something most workers don't: some control over their income. That matters, because the Marketplace looks at income, not savings. Money sitting in the bank isn't income. What counts is what shows up on your tax return, such as a pension, withdrawals from a traditional IRA or 401(k), investment gains, and Social Security benefits, including the part that isn't taxed. A Roth withdrawal that meets the IRS rules usually doesn't count.

For 2027 the IRS expects you to pay from 2.15% to 10.22% of your income toward the benchmark Silver plan, and the credit pays the rest. Here is what that means in dollars per month:

Estimates from the IRS 2027 table. Your tax credit is the benchmark Silver price in your county minus the amount in the last column, so any plan priced above that costs you the difference. Your final credit is set when you apply and settled on your tax return.

Source: IRS Revenue Procedure 2026-26 (2027 table)

Now the cliff. Above 400% of the poverty level there is no tax credit for 2027 under the law as it stands in October 2026. That is $63,840 for one person and $86,560 for a couple. Go a dollar over and the whole credit is gone, which can mean paying the full price of the plan. A large IRA withdrawal or the sale of a property in the wrong year can do it.

Source: HHS poverty guidelines for 2026, used for 2027 coverage

The other edge matters too. If your income is below 100% of the poverty level, you usually get no tax credit in Florida, which did not expand Medicaid. Planning withdrawals so you land between the two lines can make a real difference. Talk to a tax professional or financial planner before you move money, and tell the Marketplace when your income changes, because the credit is settled on your tax return with Form 8962.

Bridging to Medicare at 65

Your Medicare sign up window opens three months before the month you turn 65 and closes three months after it. Sign up early enough that Medicare starts on time, then end your Marketplace plan for the day Medicare begins. Once you have Medicare you generally can't keep getting a tax credit for a Marketplace plan, and the plan doesn't end by itself. You have to cancel it.

We don't sell Medicare on this site. Our quotes cover ages 18 to 64.

Snowbirds and seasonal residents

Marketplace coverage is tied to where you live. Each plan is sold in a service area, and many Florida plans are HMOs or EPOs with local networks. Outside that area they usually cover emergencies only. If you spend the summer up north, routine care there may not be covered.

You buy in the state that is your home. If Florida is home, buy here and check how each plan handles care away from home before you choose. If you move your main home to Florida, a move to a new area can give you a Special Enrollment Period, usually only if you had coverage before the move. A licensed agent can help you think through two homes.

Fixed indemnity before Medicare

Some early retirees look at fixed indemnity insurance like UnitedHealthcare Health ProtectorGuard (HPG) because you can apply any month. It pays set cash amounts, for example $5,000 per day in the hospital on Premier 5000. But health questions apply, pre-existing conditions can be limited, and there is no out-of-pocket maximum. In your early sixties, when a surgery or a chronic condition is more likely, that gap can hurt. Read ACA vs fixed indemnity before you choose it over a Marketplace plan.

See your numbers

Enter your ZIP code, date of birth and expected retirement income on the quote form. You'll see Marketplace plans with your estimated credit taken off, plus HPG prices, without an account or a phone number. Licensed agents help for free. We are not a government website. To enroll in an ACA plan, you finish the Marketplace application on HealthSherpa, a private enrollment site connected to the federal Marketplace.