Pre-Medicare Healthcare Cost Calculator — Methodology

How This Calculator Works

Medicare starts at 65. If you stop working before then, you have to buy your own cover for the gap years, and that cost is the single most underestimated number in early retirement planning.

This calculator projects the total cost from your retirement age to 65 under three routes — ACA marketplace, COBRA continuation, and a health sharing ministry — and models an HSA bridge to pay for it.

Inputs and Assumptions

• Current age and planned retirement age: Together these set the number of gap years to 65.
• Household size and expected MAGI: Drive ACA premium tax credit eligibility. Household size also sets who is priced: 1 is you, 2 is you and a spouse of your age, and 3 to 6 is the couple plus children under 21.
• Current HSA balance and contributions: Projected forward to test whether the bridge covers the gap.

ACA premiums use the KFF 2026 national-average benchmark silver premium of $625 a month at age 40, scaled by the federal default age curve (the law's 3:1 band): about $489 at 21, rising to 1.786× the age-21 rate at 50, 2.714× at 60 and 3.0× at 64.

A family premium is the sum of each person's premium, and only the three oldest children under 21 are charged (45 CFR 147.102(c)(1)). So a couple of the same age pays twice the one-person premium, and each child adds the age 0–14 rate, about $374 a month.

Your health does not change any figure here. A Marketplace premium can vary only by age, location, tobacco use and whether the plan covers one person or a family (45 CFR 147.102(a)), and COBRA charges the group plan's premium. Your health mainly affects out-of-pocket costs, which this calculator does not model.

Formula

gapYears = 65 − retirementAge

// ACA marketplace — 3:1 age rating, summed over the family
adultPremium   = benchmarkAge40($625) × ageFactor(age) ÷ ageFactor(40)
childPremium   = benchmarkAge40($625) × 0.765 ÷ ageFactor(40)   // CMS age 0–14
monthlyPremium = adults(1 or 2) × adultPremium
               + min(children, 3) × childPremium               // 45 CFR 147.102(c)(1)
netPremium     = monthlyPremium − premiumTaxCredit(MAGI, FPL)

// COBRA — full unsubsidised group cost, capped at 18 months
cobraMonthly = employerPremium × 1.02   // includes the 2% admin fee
// Defaults (KFF 2025): $9,325/yr single, $26,993/yr family, ÷ 12

// HSA bridge — 2026 IRS limits (Rev. Proc. 2025-19)
// single $4,400 · family $8,750 · age-55+ catch-up $1,000 (statutory)
hsaBalance(t+1) = (hsaBalance(t) + contribution) × 1.05

COBRA is capped at 18 months by statute, so it can only ever bridge part of a longer gap. The calculator makes that ceiling explicit rather than projecting COBRA to 65.

Data Sources

• KFF Employer Health Benefits Survey 2025 — average total premiums ($9,325 single / $26,993 family a year) used as the COBRA default when you do not enter your own premium.
• KFF, Marketplace Average Benchmark Premiums (2026) — national average benchmark silver premium for a 40-year-old, $625/month, scaled to other ages by the CMS federal default age curve for plan years from 2018 (45 CFR 147.102(e); CMS, “State Specific Age Curve Variations”), one ratio per age: for example 21 = 1.000, 40 = 1.278, 50 = 1.786, 55 = 2.230, 60 = 2.714, 63 = 2.952, 64 and older = 3.000; children aged 0–14 = 0.765.
• 45 CFR 147.102 — the rating rules: premiums may vary only by individual or family coverage, rating area, age (3:1) and tobacco use (1.5:1); a family premium is the sum of each member's premium, with no more than three children under 21 charged.
• Internal Revenue Service — 2026 HSA contribution limits (Rev. Proc. 2025-19) and the age-55 catch-up.
• US Department of Health and Human Services — 2025 Federal Poverty Level guidelines, used for 2026 coverage ($15,650 for one person, plus $5,500 per additional person, in the 48 contiguous states and DC; Alaska $19,550 plus $6,880, Hawaii $17,990 plus $6,330; 90 FR 5917). The credit itself is computed by the ACA subsidy calculator's engine (Rev. Proc. 2025-25 table).

Limitations

• Premiums are national averages. Health insurance is priced by rating area; your actual premium can differ substantially from these figures.
• The 400% FPL cliff is back. The enhanced ACA subsidies expired on 31 December 2025; for 2026 coverage there is no credit above 400% FPL. A House-passed extension had not become law at our last check.
• Premiums are 2026 marketplace (KFF benchmark) and 2025 employer (KFF survey) national averages.
• Your household is assumed to be you, a spouse of your age, then children. If your spouse is older or younger, their premium differs. Children are priced at the age 0–14 rate; a child aged 15 to 20 is rated 0.833 to 0.970, so for teenagers the estimate can be up to about 27% low per child. A single parent should expect a lower premium than shown for the same household size, because the second person is priced as an adult.
• COBRA eligibility depends on your employer and the qualifying event, and the 18-month maximum can be shorter in some circumstances.
• Health sharing ministries are not insurance. They are not regulated as insurance, are not guaranteed to pay, and commonly exclude pre-existing conditions. Treat that column as a cost comparison, not an equivalent product.
• Does not model out-of-pocket costs, deductibles, coinsurance, or the annual out-of-pocket maximum — only premiums.
• Does not model prescription costs or provider network differences.
• The 5% HSA growth assumption is a modelling input, not a projection.
• Does not model state-specific marketplaces or state subsidy programmes. Your state does decide Medicaid and the coverage gap, by the same rules as the ACA subsidy calculator: no credit below the poverty line, or where Medicaid likely applies (up to 138% of the poverty line in the 41 expansion states including DC). Medicaid itself is not priced here.

Last Updated

July 2026 — Methodology page published (2024 KFF, healthcare.gov, IRS and HHS figures).

October 2026 — Assumptions and formula text now state the $625 age-40 benchmark and the KFF 2025 COBRA defaults the engine already used (they still said $350 and $650/$1,900).

October 2026 — Subsidy now uses the 2026 rules (shared with the ACA subsidy calculator); HSA limits moved to 2026.

October 2026 — Premiums moved to KFF 2026 marketplace benchmarks and the KFF 2025 employer survey. The previous age factors each used the next age band's ratio (50–54 priced at the age-55 ratio, and so on) on a 2024 base.

4 October 2026 — Your state now decides Medicaid and the coverage gap (it was display-only, so incomes in the Medicaid range were shown a credit, and a $0 credit was always labelled as being above 400% FPL).

14 October 2026 — Alaska and Hawaii use their own, higher poverty guidelines. Both had been measured against the 48-state table, so an Alaskan on $70,000 was placed over the 400% cliff instead of at 358% of the Alaska line.

14 October 2026 — Premiums use the full CMS default age curve, one ratio per age, instead of straight lines between six points (at 63: 2.952, not 2.9285).

14 October 2026 — A family premium is now the sum of each member's premium (45 CFR 147.102(c)(1)). Each extra person used to be 65% of one adult, so a couple was priced at 1.65× one person instead of 2×. The health-status input was removed: it multiplied the ACA premium alone by up to 1.35, although premiums cannot vary by health, and that could switch the recommendation to COBRA.