Your options before 65.
| Option | How long | Watch out for |
|---|---|---|
| COBRA from your employer | Usually up to 18 months | You pay the full premium plus up to 2%. No tax credit. |
| HealthCare.gov plan | Until Medicare | Losing job coverage opens a 60-day window. Income sets your credit. |
| Spouse's employer plan | As long as offered | Check whether it is affordable for family members. |
| Retiree coverage | Varies | Offered by some public and large employers; compare it with the Marketplace. |
Leaving COBRA voluntarily in the middle of the year does not open a Special Enrollment Period, so decide at retirement or at Open Enrollment.
Why income planning matters more than assets.
HealthCare.gov does not look at savings, home equity or account balances. It looks at modified adjusted gross income. For a retiree that includes traditional IRA and 401(k) withdrawals, pensions, interest, dividends, capital gains and all Social Security benefits, but not qualified Roth withdrawals or the return of basis from selling assets you already paid tax on.
Ages 60 to 64 pay the highest premiums, so the credit is largest for them and so is the loss at the cliff. In Travis County a 60-year-old single retiree earning $62,000 got $813 a month of credit for 2026; at $63,000 the credit was $0 (CMS Marketplace API, 2026 prices).
A simple bridge plan.
- Estimate the income you will actually report each year until 65, and where the 400% line sits for your household.
- Decide which accounts to draw from so you land under the line, with a margin for surprises.
- Enroll within 60 days of losing job coverage, or at Open Enrollment.
- Update HealthCare.gov within 30 days when income changes.
- Plan your Medicare enrollment window: it starts three months before your 65th birthday month.
This is general information, not tax or investment advice. Coordinate withdrawals with your tax professional.
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Get my free optionsQuestions people ask.
Is COBRA or Obamacare cheaper for early retirees?
Usually the Marketplace, if your income qualifies you for a premium tax credit, because COBRA costs the full premium with no credit. Above 400% of the poverty level, compare the two directly.
Do retirement savings count as income for the ACA?
Balances do not. Taxable withdrawals do, as do pensions, Social Security, interest, dividends and capital gains.
Sources.
- U.S. Department of Labor, COBRA continuation coverage. dol.gov
- HealthCare.gov, What's included as income. healthcare.gov
- CMS Marketplace API (HealthCare.gov plan and eligibility data), queried September 23, 2026. developer.cms.gov
- IRS Rev. Proc. 2026-26, 2027 applicable percentage table. irs.gov
- HealthCare.gov, Special Enrollment Period. healthcare.gov
General information for Texas and Oklahoma residents, not tax or legal advice. Rules and numbers can change; this page is reviewed on the date shown above. Your eligibility and prices are set by HealthCare.gov or the insurer when you apply.
Who wrote this.
RedHealth Advisors LLC is a licensed health insurance agency in Round Rock, Texas (Texas agency license 3449979, NPN 22110493), serving Texas and Oklahoma. Ryan Hutson is a licensed agent (NPN 21321807). Licensing details.