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

Bridging to Medicare in Texas

If you retire before 65 in Texas, your main bridge to Medicare is usually a marketplace plan through HealthCare.gov, or COBRA plus Texas continuation for a while. Texas continuation ends once you can get Medicare.

Tax credits are based on your expected household income for the year, not your savings. Since the enhanced credits ended after 2025, there is again a cliff: above 400% of the poverty level, you get no credit. Planning when you draw from retirement accounts can make a large difference. The 2026 benchmark Silver premium for a 40-year-old in Texas averaged $661 a month before credits, and premiums are higher at older ages.

Be careful not to plan your income too low. Texas has no Medicaid expansion, so an early retiree without minor children whose income falls below the poverty level generally gets neither Medicaid nor a marketplace tax credit.

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 (enhanced) premium tax credits expired at the end of 2025 and were not renewed for 2026, so help returned to the pre-2021 rules. That means credits generally stop at 400% of the federal poverty level, and lower-income enrollees who used to pay nothing now pay part of the premium. The U.S. House passed a three-year extension in January 2026, but the Senate had not passed one as of fall 2026, so 2027 credits follow the same rules unless Congress acts.