Health Insurance Before Medicare – Private vs. ACA Plans
For many retirees, the insurance gap between retiring and becoming eligible for Medicare at age 65 can feel like a mystery. There are a lot of misconceptions about what is available and the costs. The two most common options include -
1. ACA Marketplace plans, and
2. Private (off-exchange) plans.
Each comes with trade-offs in cost, flexibility, and coverage.
ACA Marketplace Plans
Marketplace plans are available through Healthcare.gov or your state exchange. For example, in Virginia, it is run through https://www.marketplace.virginia.gov/.
These plans are usually best for those without access to employer coverage who want stable, comprehensive insurance, especially if their income qualifies for subsidies or they have pre-existing conditions.
Pros:
Subsidies available. The most significant advantage is income-based premium tax credits, which often make ACA plans extremely affordable. It is based on income, so it’s not uncommon for a retiree with a few million saved to still get a subsidy if they have little taxable income.
Essential benefits guaranteed. Includes preventive care, prescriptions, hospitalization, and more.
No medical underwriting. Premiums aren’t based on your health.
Cons:
Limited provider networks. Many ACA plans are HMOs with fewer in-network doctors. If you travel a lot, this can create a problem if you need care away from home. Emergency care is typically provided, but very little else.
Enrollment timing. Unless you qualify for a special enrollment period, you're limited to Nov 1–Jan 15 each year.
Income-based pricing. If your income is just over the subsidy thresholds, the cost can spike significantly.
Private (off-exchange) plans
These plans are purchased directly from insurance companies outside the ACA Marketplace.
These plans are usually best for those who don’t qualify for ACA subsidies, are in good health, and want broader provider access.
Pros:
Flexible timing. You can enroll at any time of year.
More provider choice. Often includes broader or national networks, especially useful for frequent travelers or those with specific provider needs.
Potentially lower premiums. Especially if you’re healthy and don’t use much care.
Cons:
No subsidies. You pay full sticker price regardless of income.
Less coverage depth. Some private plans exclude key services (like maternity or mental health). ACA plans have a full suite of coverage, but you pay for it.
For clients, I connect them with several independent consultants in this space. We start with the assumption that they will be on an ACA plan. We then look to see if they will qualify for a sizable subsidy. If not, do they have any pre-existing conditions? If they don’t, then we review private health insurance options and compare them with their options through the ACA.
Once you turn 65, the game changes. ACA subsidies go away, and you’ll need to enroll in Medicare during your Initial Enrollment Period. Until then, plan carefully to avoid gaps or surprise expenses.
Happy Planning,
Alex
This blog post is not advice. Please read disclaimers.