7 facts early retirees should know about health coverage | hioscar Blog | Oscar
7 facts early retirees should know about health coverage
Retiring early? Discover 7 facts to help you choose the right health coverage and manage costs before Medicare at 65.
How Insurance WorksOscar Member Resources
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Retiring early means you've reached a milestone you've been planning for. Maybe you're leaving full-time work to travel more, spend time with family, consult on your own schedule, or simply enjoy a slower pace of life.
Choosing a health plan is an important part of preparing for retirement. The right coverage can help you plan for healthcare costs, access the care you need, and feel more confident about the years ahead. At Oscar (opens in new tab), we offer ACA plans designed to keep you covered until you're eligible for Medicare at 65, with benefits like $0 preventive care¹,² and Virtual Urgent Care³,⁴ to help you navigate your new lifestyle with confidence.
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Whether you decide to browse the Marketplace independently or partner with a licensed healthcare broker to evaluate your choices, reviewing these seven key facts first will help you define your requirements and ultimately choose the option that best meets your needs.
1. Health insurance is an essential part of your retirement plan
An important part of retirement planning is preparing for healthcare needs before Medicare kicks in. Healthcare affordability is a major challenge in the United States; One study finds that only 49% of U.S. adults can consistently afford (opens in new tab) necessary care. This financial pressure leads more than 1 in 4 adults to delay or skip care (opens in new tab) altogether, which often results in more complicated and expensive issues later. Bridging the gap to age 65 requires a proactive budget to avoid these financial pitfalls.
2. Retiring early means you'll take a more active role in choosing your health coverage
For many people, retiring early is the first time in years they've had to choose their own health insurance. Instead of enrolling in an employer-sponsored plan, you'll compare Marketplace plans based on what matters most to you.
That shift can feel overwhelming at first, but it also gives you more control over your coverage so you can find a plan that aligns specifically with your new lifestyle. The key is to focus on the retirement you are building, rather than the work-life you have left behind.
3. Your retirement income can affect what you pay for health coverage
To estimate your household's income, start with your most recent tax return and adjust it for any major changes you expect. Since you're retiring, this means removing your former salary while remembering to include other income sources you'll still have, such as interest, capital gains, alimony, consulting fees, or withdrawals from your IRA and 401(k) accounts.
Taking time to estimate your income before Open Enrollment helps you see what financial assistance you might qualify for and gives you a clearer picture of your actual costs.
4. Your monthly premium is only part of what you’ll pay for healthcare
Understanding your annual out-of-pocket maximum (opens in new tab) is also essential for early retirees. This limit acts as a critical financial safety net by capping the total amount you are responsible for paying for covered medical services in a plan year. Once this limit is reached, your health plan covers 100% of the cost for covered services.
5. The best plan for you depends on how you expect to use healthcare
If you rarely see a doctor, a high-deductible plan with a lower premium might preserve your savings. However, if you manage chronic conditions, paying a higher premium for lower cost-sharing is often the more predictable financial choice.
When considering coverage, do not focus solely on monthly premiums. Compare deductibles, prescription drug coverage, provider networks, and annual out-of-pocket maximums to find a plan that supports the care you know you'll need.
Bronze: If you mostly want routine checkups but rarely see a doctor for illnesses, medicine, or hospital visits, a Bronze plan can save you money on your monthly bill. Just remember: you will have to pay for most of your medical care yourself until you hit your deductible (the amount you pay before insurance starts helping). If you worry about surprise bills, you might prefer a plan with a lower deductible.
Silver: If you visit the doctor often or take regular medicine, a Silver plan might be a good middle ground. It has a lower deductible than Bronze plans, which can help lower your total costs. If you qualify for extra financial help, your costs could be even lower.
Gold or Platinum: Choose these if you expect to see doctors often for ongoing health issues, need regular tests, or take a lot of medicine. These plans offer the most protection against high medical bills, but remember that your monthly bill will be higher.
6. Preventive care helps you stay healthy and saves you money down the road
One of the benefits of retiring early is having more time to focus on yourself. That might mean finally scheduling the annual physical you've been putting off, catching up on recommended screenings, or talking with your doctor about aches and pains you've learned to live with while juggling work and family.
Many preventive services, including annual wellness visits, recommended screenings, and certain vaccines, are covered at no additional cost (opens in new tab) when you receive them from an in-network doctor. Staying on top of preventive care can help you catch potential health issues earlier and build healthy habits that support long-term well-being.
Preventive care can also save you money over time. In fact, one study found that prioritizing routine checkups and other preventive measures can help you save $3,000 to $5,000 annually in out-of-pocket costs (opens in new tab). For an early retiree, that's money that stays in your pocket to fund your lifestyle, rather than spending on health issues that were preventable.
7. Provider networks and prescription coverage vary from plan to plan
If keeping your current primary care doctor or specialist is important to you, check that they're in the plan's provider network before you enroll.
Additionally, prescription coverage can vary significantly between plans. If you take medications regularly, check the plan's formulary (opens in new tab) (the list of covered drugs) and review drug tiers to understand your specific costs. Modern health plans, like Oscar, often provide digital tools, such as mobile price-comparison features and integrated virtual care, which can help you manage expenses and avoid high out-of-pocket costs while you bridge the gap to age 65.
The bottom line
For early retirees, health coverage protects your financial independence until Medicare eligibility. Take the time to find a plan that treats healthcare as a strategic component of your retirement wealth. Learn more (opens in new tab).
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¹Members are eligible for $0 preventive care. Please refer to your complete Summary of Benefits and Coverage (SBC) at hioscar.com/forms for more information.
²An annual wellness exam, and preventive services performed during an annual wellness exam, are provided at $0 cost to you. If, during your exam, a service that is considered diagnostic or non-preventive is provided to you, you may be responsible for the cost — or a share of the cost — for those additional services provided during your office visit depending on your plan.
³Oscar’s Virtual Urgent Care offerings are not available in US territories or internationally. If you have an HSA-compatible high-deductible health plan or a Secure plan, you won't be eligible for $0 visits until deductible is met. Prescriptions, visits and services may be limited per provider discretion.
⁴Oscar’s Virtual Urgent Care offerings are not available on the Hy-Vee Health with Oscar plan. Please see your policy for further information.
⁵The Diabetes Care Plan is available to all eligible persons, regardless of disease status, in AZ, FL, GA , IA, IL, KS, MO, NC, NE, OH-B (Buckeye), OH-C (Cleveland), OK, TN, and TX. Plan names vary by metal: Bronze Simple Diabetes, Buena Salud Bronce Simple Para Diabetes, Silver Simple Diabetes, Gold Simple Diabetes. If you don’t have type 1 or type 2 diabetes, or you have pre-diabetes or gestational diabetes, these plans may offer you certain reduced costs, but you are not eligible for all Rewards and Incentives program offerings that offer even more savings. Coverage for benefits is limited per clinical guidelines. Maximum out-of-pocket insulin cost depends on applicable state rules. Review your plan documents to confirm costs. Oscar will apply the lower of the maximum state-mandated out-of-pocket insulin cost, or $100.
⁶The Breathe Easy COPD Plan is available to all eligible persons, regardless of disease status, in AZ, FL, GA, IA, NC, OH-B (Buckeye), OH-C (Cleveland), OK, TN, and TX. Plan names vary by metal and state: Bronze Simple Breathe Easy with Enhanced COPD Benefits, Silver Simple Specialist Saver with COPD, and Silver Simple Breathe Easy with Enhanced COPD Benefits.
⁷The Women’s Health with Menopause Benefits Plan is available to all eligible persons, and is most suitable for women who are experiencing, or have experienced, natural or forced menopause. This plan is available in AZ, FL, GA, IA, MO, NC, NE, OH-B (Buckeye), OH-C (Cleveland), OK, TN, and TX. Plan names vary by state: Silver Simple Women's Health with Menopause Benefits and Silver Simple Women's Health with Menopause Benefits Guided Care.
⁸The Chronic Care CKM Plan is available to all eligible persons, regardless of disease status, in AL, AZ, FL, GA, IA, KS, MO, MS, NC, NJ, OH-B (Buckeye), OH-C (Cleveland), OK, TN, and TX. Plan names vary by metal and state: Bronze Simple MultiCondition Guided Care, Bronze Simple Chronic Care CKM, Silver 3750 Chronic Care CKM, Silver Simple MultiCondition Guided Care, Silver MultiCondition Care, Silver Simple Chronic Care CKM, and Gold 1500 Chronic Care CKM. Coverage for benefits is limited per clinical guidelines. Maximum out-of-pocket insulin cost depends on applicable state rules. Review your plan documents to confirm costs. Oscar will apply the lower of the maximum state-mandated out-of-pocket insulin cost, or $100.
