For 30 years, someone else paid most of your health insurance bill. It never showed up in your mailbox. It came out of your employer's budget, and the slice you did pay disappeared from your paycheck before you ever saw it.
Stop working before 65, and that bill lands on you. The fear of it is why so many of the long-tenured professionals I work with keep working until 65, even when the rest of their plan says they could stop sooner. They know Medicare doesn't start until 65, and how they would get health insurance before then is the big unknown. So they stay. Not because they want two or three more years at the office, but because the paycheck comes with coverage.
I understand the instinct. But I've watched it set retirement dates that the numbers never asked for.
The question I ask is simple: do you still WANT to work? If the answer is no, and health insurance is the only thing holding you there, it's worth taking a hard look at what stands between your last paycheck and Medicare.
Think of those years as a bridge. Most people never step onto it because they have no idea what's on it. Once you know the ways across, what the crossing costs, and how the money decisions you make on that bridge follow you onto the other side, health care stops being the thing that picks your retirement date. You get to pick it.
Three ways across
There are really only three ways to get from your last day of work to your 65th birthday with health coverage.
Retiree medical from your employer. Some employers still offer it, and it is worth a great deal. If you are a federal employee, you can generally keep your Federal Employees Health Benefits (FEHB) coverage into retirement, but only if you retire on an immediate annuity and were enrolled for the five years of service right before you retire. Miss that five-year window and the door closes. That is one of those decisions you get to make only once, and it is made years before your retirement date.
COBRA. When you leave a job, federal law usually lets you keep your employer's group coverage for up to 18 months. The catch is the price: you now pay the full premium yourself, plus a small administrative fee. COBRA works well as a short bridge. Retire at 63½ and it may carry you all the way to Medicare. Retire at 62 and it runs out with a year and a half still to go.
The ACA marketplace. This is where most early retirees end up, and it is where your health insurance and your tax return become the same conversation. Marketplace premium help, the premium tax credit, is based on the income you report.
Where taxes and health care meet
Here is what changed this year. The enhanced marketplace subsidies expired at the end of 2025, and the old "subsidy cliff" came back for 2026. If your household income is above 400% of the federal poverty level, you get no premium tax credit at all. For 2026 coverage, that line sits at $62,600 for a single person and $84,600 for a married couple.
Notice the word cliff. It is not a gentle slope. A couple reporting $84,000 can get meaningful help with their premiums. The same couple reporting $85,000 gets none.
So think about what counts as income on that bridge. An extra IRA withdrawal to pay for the kitchen remodel. A Roth conversion. Selling a stock with a big gain. Each one raises the income you report, and each one can push you off the cliff. It's not just what you make, it's what you keep, and on the bridge to Medicare, the income you choose to report decides how much of your health insurance you keep paying for yourself.
The two-year lookback nobody sees coming
Now for the part that surprises almost every client I meet.
Once you are on Medicare, you pay a monthly premium for Part B. In 2026, the standard premium is $202.90 per person. But Medicare charges more if your income is higher, through something called the Income-Related Monthly Adjustment Amount, or IRMAA. In 2026, the surcharge starts once income passes $109,000 for a single filer or $218,000 for a married couple, and the top tier brings Part B to $689.90 a month per person. Part D, your prescription coverage, carries its own surcharge on top of that.
Here is the catch. Medicare doesn't look at your income this year. It looks at your tax return from two years ago. Your 2026 premiums are set by your 2024 income.
This hits hardest for the people who did what felt safest and worked right up to 65. Picture a couple who both turn 65 and retire in 2026. Their income drops the day the paychecks stop. But in 2024, at 63, they were both working full time and earned $240,000 together. Medicare looks back at that year and bills each of them $284.10 a month for Part B instead of $202.90. That's about $1,950 more for the year, for income they no longer have.
Or picture the couple who retired at 62 and did something smart: a large Roth conversion at 63, while their income was low. If that conversion pushed their 63-year-old tax return over the line, it sets their Medicare premiums at 65. The conversion may still be the right move. It just has to be planned with the lookback in mind, not discovered when the first Medicare bill arrives.
There is good news on the first couple. Retirement counts as a "life-changing event." Social Security has a form, the SSA-44, that lets you ask it to use your more recent, lower income instead of the old return. Most people don't know it exists, so they pay the higher premium for a year or more without ever asking.
Decisions you make once at 65
The far side of the bridge has its own one-time decisions. If you plan to buy a Medicare Supplement (Medigap) policy, you get a six-month open enrollment window that starts the first month you have Part B and are 65 or older. During that window, insurers are not allowed to turn you down or charge you more because of your health. After it closes, they generally can. Enrollment timing for Parts B and D matters too, and late enrollment can come with penalties that last for life.
Build the whole estimate before you cross
Health care is one of the largest expenses of retirement, and the bridge years are often the most expensive stretch of all. When I build a plan, I want to know what crossing will cost before a client gives notice: which coverage carries them to 65, what income they will report each year on the way, and how that income lines up with the subsidy cliff before 65 and the IRMAA brackets two years later.
I wrote a companion piece for CFP Board's LetsMakeAPlan.org on what to expect once you reach Medicare: Health-Care Costs in Retirement: What to Expect and How to Prepare. It walks through building an all-in annual estimate, which is the next step once you know how you're getting across.
You only cross this bridge once. If health insurance is the only thing keeping you at work, let's map the crossing together and see whether 65 is really your date. Start with a 30-minute Exploratory Call.
Figures are for 2026 and change every year. This article is for general education and is not individual tax, legal, or insurance advice. Talk with your CPA about how any income decision affects your own tax return, premium tax credit, and Medicare premiums.
Sources: CMS, 2026 Medicare Parts A & B Premiums and Deductibles; Social Security Administration, Form SSA-44; Medicare.gov, Medigap open enrollment; U.S. Department of Labor, COBRA continuation coverage; OPM, continuing FEHB into retirement; 2026 federal poverty guidelines for premium tax credit eligibility.