Health Insurance for Early Retirees in Arizona (Ages 55 to 64)

Bridging to Medicare in Arizona

Retiring before 65 means finding coverage to bridge the gap until Medicare. For most Arizona early retirees, that means a Marketplace plan, COBRA for a period, or AHCCCS if income is low enough. Premiums for people in their late 50s and early 60s are much higher than for younger buyers, so the subsidy math matters.

Since the extra federal help ended after 2025, the 400% of poverty income cap is back. Going even a little over it in 2026 can mean losing the whole premium tax credit. If you control when you draw from savings, take retirement account withdrawals or sell investments, a licensed agent or tax professional can help you plan your countable income for the year.

If your countable income is very low, for example while you live on cash savings, you may qualify for AHCCCS instead. Keep in mind the new work and renewal rules starting in 2027, which include exemptions for some groups.

Why your income estimate matters so much

Marketplace subsidies are based on your modified adjusted gross income (MAGI) for the coverage year. For early retirees, that number is partly in your control: it depends on which accounts you draw from and when.

Withdrawals from traditional IRAs and 401(k)s count as income. Qualified Roth withdrawals generally don’t. For ACA purposes, MAGI also adds back tax-exempt interest and any Social Security benefits that aren’t taxed. A tax professional and a licensed agent working from the same income plan can make a large difference to what you pay.

Subsidies in 2026

The extra federal premium tax credits ended on December 31, 2025, and Congress has not brought them back. For 2026, households earning more than 400% of the federal poverty level get no premium tax credit at all, and those who still qualify get less help than in 2025. In Arizona, the average net premium Marketplace enrollees paid roughly doubled, from $113 a month in 2025 to $229 a month in 2026.