Health insurance before Medicare: the premium credit from your last job to 65
Medicare starts at 65, so an early retiree buys coverage for every year in between, and the Marketplace premium credit decides most of what it costs.
You pay per month
$401
Credit $1,199 a month; you are at 260 % of the poverty line.
| Poverty line used | $21,150 |
| Your required share of income | 8.75 % |
| Credit per year | $14,390 |
| Income ceiling for any credit | $84,600 |
Worked out by Radif Partners · How we calculate · figures read on irs.gov and healthcare.gov · not personal financial advice
Health insurance before Medicare usually means a Marketplace plan bought on HealthCare.gov, because Medicare only starts at 65 and employer coverage ends with the job. The premium tax credit caps what you pay for the benchmark silver plan at a share of your modified adjusted gross income (MAGI): from 2.10 % at the lowest incomes to 9.96 % between 300 % and 400 % of the poverty line in 2026 (Rev. Proc. 2025-25), and from 2.15 % to 10.22 % in 2027 (Rev. Proc. 2026-26). Coverage for 2026 uses the 2025 poverty guidelines, $15,650 for one person and $21,150 for two; 2027 coverage uses $15,960 and $21,640. Above 400 % of the line there is no credit at all. The benchmark premium depends on age and county, so read it on HealthCare.gov. The calculator above gives your monthly cost.
Why the bridge to 65 is longer than the bridge to 59½
Medicare eligibility at 65 is set by law, and coverage starts on a date that depends on when you sign up (Medicare.gov). Someone who stops at 50 has nine and a half years to cover before every retirement account opens, but fifteen years before Medicare. Health coverage is often the largest single line in an early retirement budget, and it moves with income in a way that rent and groceries do not.
The common route is the Marketplace. Employer coverage can be continued through COBRA for a limited time at full cost; the COBRA comparison prices that option. After it, or instead of it, Marketplace coverage with the premium tax credit is what most early retirees buy.
How the premium tax credit is computed
Three numbers decide the credit. Your MAGI, the income figure for the coverage year that starts from adjusted gross income. The poverty line for your household size, which HealthCare.gov takes from the guidelines of the previous year (HealthCare.gov poverty level page). And the premium of the benchmark plan, the second-lowest-cost silver plan where you live. Your MAGI divided by the poverty line gives a percentage; that percentage gives the share of income you are expected to pay; the credit is the benchmark premium minus that share.
| MAGI as % of poverty line | 2026 share of income | 2027 share of income |
|---|---|---|
| up to 133 % | 2.10 % | 2.15 % |
| 133 % to 150 % | 3.14 % to 4.19 % | 3.23 % to 4.30 % |
| 150 % to 200 % | 4.19 % to 6.60 % | 4.30 % to 6.78 % |
| 200 % to 250 % | 6.60 % to 8.44 % | 6.78 % to 8.66 % |
| 250 % to 300 % | 8.44 % to 9.96 % | 8.66 % to 10.22 % |
| 300 % to 400 % | 9.96 % | 10.22 % |
The share does not depend on the premium. A couple at the same MAGI pays the same amount for the benchmark plan in a cheap county or an expensive one; the credit absorbs the difference. That is why the table below can be computed without any premium at all.
| Couple, MAGI | % of poverty line (2026) | Benchmark cost per month, 2026 | Same, 2027 |
|---|---|---|---|
| $30,000 | 142 % | $92 | $90 |
| $45,000 | 213 % | $265 | $265 |
| $60,000 | 284 % | $473 | $476 |
| $75,000 | 355 % | $623 | $639 |
| $84,600 | 400 % | $702 | $721 |
A plan cheaper than the benchmark costs you less than the figure in the table, a richer plan more. If the credit is larger than the premium of the plan you choose, the plan costs nothing and the unused part is lost.
Your monthly premium after the credit
You pay per month
$989
| Poverty line used | $15,960 |
| Your required share of income | 8.68 % |
| Credit per year | $7,328 |
| Income ceiling for any credit | $63,840 |
2026 against 2027: what changes, and when to look
Both years keep the 400 % ceiling: the tables published for 2026 and 2027 stop there. The shares move up slightly in 2027, so a single person at $40,000 of MAGI, 251 % of the 2027 line, is expected to pay 8.68 % of income, $289 a month, toward the benchmark plan. The poverty line rises too, which lowers your percentage for the same income.
The dates matter this autumn. HealthCare.gov states that before November 1 you can estimate 2027 savings using 2026 amounts, and that savings are "based on your income estimate for the year you want coverage, not last year" (HealthCare.gov, lower costs). Open Enrollment runs from November 1 to January 15 (HealthCare.gov, COBRA and the Marketplace). The 2027 benchmark premium for your county is therefore something to read on HealthCare.gov from November 1, not a figure to guess from an average. This page publishes no average premium for that reason.
The income you report is the income you choose
For an early retiree, MAGI is mostly a decision. A sale from a brokerage account adds only its gain. A withdrawal of Roth IRA contributions adds nothing. A Roth conversion, a 401(k) payment or a 457(b) payment adds every dollar. Two retirees spending the same $60,000 can show very different MAGI depending on where the money comes from, and pay very different premiums.
The floor matters as well as the ceiling. Below 100 % of the poverty line, HealthCare.gov says you probably will not qualify for Marketplace savings but may qualify for Medicaid; in states that expanded Medicaid, the limit is 138 % of the line. An early retiree living on Roth contributions and cash can land there by accident. A small conversion or a taxable sale can lift MAGI back into the credit range, which is often cheaper than it looks.
Planning the years until 65
Treat the premium as a yearly line in the bridge budget, with the expected share of income from the table above plus any difference between your plan and the benchmark. Each autumn, estimate the coming year's MAGI before choosing how much to convert or sell, and update the estimate on HealthCare.gov when it changes during the year. The 400 % cliff page shows what one dollar too many costs, and the bridge page folds the premium into the money needed before 59½.