Your Top Options for Health Insurance After Retirement

Jun 4, 2024 2 min read

When you’re thinking about retiring, you may be planning to travel, volunteer with your favorite organizations or spend more time with family and friends. As part of your planning, make sure you factor in the cost of health insurance in retirement. Depending on your age and work history, paying for health insurance after retirement can be one of your biggest expenses, but foundational to financial stability 

Here are the main ways retirees pay for health insurance.

Your Company Covers Health Insurance for Retirees

Staying on your company’s health insurance after you retire may be an attractive option, but it’s rare. Only 3% of private-sector employers offer it, according to the Employee Benefit Research Institute. (Your odds may be better if you work for the government.)

You’ll have to check with your human resources department to find out what your health insurance coverage costs will be. Some companies cover retirees the same way they cover employees. In others, retirees have to foot some or all of the bill for their healthcare coverage.  

Check your documentation carefully so you’re prepared for the costs, and for any possible changes in the future.

You’re Retiring, and You’re Not 65 Yet 

Age 65 is the magic number for Medicare (more on that later). So, if you’re under 65 and you don’t have coverage from your employer, you’ll need to find   a health insurance option until you reach Medicare eligibility.  

Retirees can continue their employer’s coverage under COBRA (the Consolidated Omnibus Reconciliation Act) for 18 to 36 months, but they typically have to pay the total health insurance premium. 

That is, you’ll need to cover the amount you were paying as an employee as well as the amount your employer was paying. That makes COBRA expensive for most people, but you may want to choose it if you’re retiring on short notice. 

Instead of COBRA, you may want to buy coverage through the Health Insurance Marketplace. Depending on the state you live in, the number of people in your household and your income, you might qualify for savings or tax credits in certain marketplace plans. 

Because there are options for deductibles, copays and more, costs can vary significantly based on the plan you choose. 

Open enrollment in the marketplace is from November 1 to January 15, but most people qualify to enroll outside of that time period, if within 60 days of the loss of employer group health coverage.  

You Qualify for Medicare

Health insurance after retirement can change when you reach age 65. That’s when you should qualify for Medicare, which is government-sponsored health insurance for seniors. (You may qualify when you’re younger if you have certain health conditions.)

Medicare coverage comes in four parts:

  • Part A: Hospital insurance, which is generally free.
  • Part B: Medicare insurance, which requires a monthly premium payment based in part on your income.
  • Part C: Advantage plans, which require a premium payment that varies depending on the plan and insurance carrier you choose.
  • Part D: Drug coverage, which also requires a premium payment that varies depending on the plan and insurance carrier you choose.

You’ll generally need to pay a deductible and copay with Medicare plans. But for most people, enrolling in Medicare results in savings compared to paying for insurance in the private market or through employer group. This can be a factor when you’re deciding when you want to retire.

Choosing Medicare plans and estimating costs can be complicated, so you’ll want to start early. The first step is to enroll in original Medicare through Social Security Administration ( You can enroll in original Medicare from three months before your 65th birthday; the month of your birthday and three months after. You must have a Medicare card indicating the effective date of your Part B to enroll in a Medicare Supplement or Medicare Advantage plan. 

Reach Out For Help

A Farm Bureau agent or financial advisor can help you understand your health insurance options and expenses so you have the information you need to plan for your retirement. 

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.