Health insurance for early retirees in Minnesota

Individual plans price by age, and federal rules allow a 3 to 1 spread: a 64-year-old can be charged up to three times what a 21-year-old pays for the same plan. That is the sticker price. Whether you pay it depends on the next section.

MNsure's tax credit is based on the household's expected income for the year. For 2027 coverage it is available up to $86,560 for a couple and $63,840 for one person, and under the cap the benchmark plan is limited to a share of income that tops out at 10.22%. Pensions, Social Security, taxable withdrawals and Roth conversions all count; drawing from savings you already paid tax on does not. Two retirees with the same net worth can pay very different premiums depending on which account they draw from — a conversation to have with us and your tax preparer together, before the year starts.

The cap is a cliff: one dollar over and the whole credit is gone. The enhanced credits that softened this from 2021 through 2025 have expired.

COBRA keeps your employer plan for up to 18 months at the full premium plus a small administrative charge. It is the right bridge when you are mid-treatment with doctors you cannot lose, or when the employer plan is unusually rich. It is the wrong bridge when a MNsure plan with a credit costs a fraction of it, which is the more common case. Losing employer coverage gives you 60 days to enroll in a marketplace plan; taking COBRA first and switching later is possible only at open enrollment or when COBRA ends.

Medicare's Initial Enrollment Period is the seven months around your 65th birthday. Enroll in the three months before it and coverage starts the month you turn 65; the MNsure plan ends the day before. Minnesota is one of three states that set their own Medigap plan designs instead of using the lettered plans sold elsewhere: every insurance company that sells Medigap here offers Basic, with optional riders, and Extended Basic; some also sell a few other Minnesota plan types. Premiums here are not based on age, and anyone enrolling in Part B gets a six-month window to buy a Medigap plan with no health questions, whatever their age. Part B is $202.90 a month in 2026 for most people — often less than the bridge plan cost.

Then the job is to find the right plan at full price, and it is usually less painful than the sticker price suggests: you can usually find a low-copay bronze plan that suits most people fine. HSA-eligible plans are everywhere now, so the account is a feature to weigh rather than a reason to pick a plan — if you want the deduction, a couple can set aside up to $9,000 in 2027 ($8,750 for 2026; $1,000 more each from 55) before tax for the deductible and for Medicare premiums later.