COBRA or an ACA Plan? Healthcare Decision Guide for Retiring Before 65
Retiring early means bridging the gap to Medicare. The right path depends on your numbers, and getting it right can save you a great deal of money.
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What’s Inside
The two main paths to the gap
When you retire before 65, you usually have more than one way to stay covered until Medicare. The two most common are continuing your employer plan through COBRA or enrolling in an individual ACA plan through Connect for Health Colorado. The guide walks through how each one works.
COBRA
Keep the exact employer plan you have now, the same network and benefits, for up to 18 months. You pay the full premium yourself, and you generally have 60 days from when your coverage ends to elect it.
An ACA Plan
An individual plan through Connect for Health Colorado. Depending on your income, you may qualify for a Premium Tax Credit that lowers what you pay. Leaving your job opens a Special Enrollment Period, so you don’t have to wait.
The Framework
The factors that decide it
There is no single right answer here. The best path depends on a handful of specific numbers. Here is what each one tells us and why it matters.
Your income (MAGI) this year
The biggest factor. Premium Tax Credits are based on your income, and the right range can make a subsidized ACA plan cost dramatically less than COBRA.
Your income next year
The one most people overlook. Income often drops once you’re fully retired, which can make a subsidized ACA plan the better value come January.
Deductible and out-of-pocket maximum
These define your worst-case spending. A lower premium is not a better deal if it comes with a much higher out-of-pocket maximum.
Progress toward them this year
If anyone on the plan has made real headway toward the deductible or out-of-pocket max, switching mid-year resets it to zero.
Premium per person, medical only
COBRA and ACA cover different people differently. Per-person, medical-only numbers let us compare the coverage apples to apples.
Your doctors and medications
Before any recommendation, we confirm your providers are in network and your prescriptions are covered on the plan you’re considering.
A Note on the Income Thresholds
The numbers change, so we point you to the current ones
Premium Tax Credit eligibility and the income thresholds behind it can change from year to year, so the guide focuses on the framework rather than this year’s specific figures. We keep an up-to-date explainer on how Premium Tax Credits work in Colorado.
Colorado Premium Tax Credits Guide
Our current explainer on how the credits work, who qualifies, and how income affects what you pay. Updated as the thresholds change.
Best Price Guarantee
As always, our services are 100% FREE and there is no extra cost or mark-up. Whether you get your health insurance through us, another agent/broker or directly from the marketplace or insurance carrier, you’ll pay the exact same monthly premium for the same plan, so you can rest assured that you’re getting the best available price.
Let’s run your numbers together
You do not have to sort this out on your own. Bring your numbers to a no cost planning meeting and we’ll compare COBRA against your ACA options side by side, and map out the right plan for both this year and next.
Book a Free Planning Meeting