Reviewed September 2026.
A bridge strategy is the plan for health coverage and cash from the day you leave employer insurance until Medicare (often age 65) starts. It answers “which coverage?” and “which dollars pay for it?” The companion worksheet for sizing those dollars is Estimate healthcare costs before Medicare. This page is the menu of bridge tools, not the full cost spreadsheet.
Coverage rules and subsidy math change. Confirm COBRA notices, Marketplace special enrollment, and Medicare enrollment windows with official sources when you act.
Bridge building blocks
| Tool | Role in the bridge | Watch-outs |
|---|---|---|
| COBRA | Temporary continuation of the employer plan (often 18 months for many qualifying events) | Full premium (employee + employer share) plus admin fee; clock is limited (COBRA vs Marketplace) |
| Marketplace plan | Individual coverage; possible premium tax credit based on income | Network and formulary change; income changes affect subsidies |
| Spouse’s employer plan | Sometimes the cheapest solid option | Open enrollment / special enrollment timing |
| HSA cash / invested HSA | Pays qualified medical expenses tax-advantaged if rules allow (HSA for retirement healthcare) | Must stay eligible to contribute; not a premium piggy bank for every case |
| Taxable cash / HYSA reserve | Premiums and non-HSA costs (Emergency fund) | Do not confuse with invested retirement accounts you hoped not to touch |
| Part-time work with benefits | Extends employer coverage | Earnings may interact with Social Security claiming plans (Gliding into retirement cash) |
Short-term limited duration policies are usually a weaker substitute for comprehensive coverage: Short-term vs Marketplace.
A simple sequence many households use
- Pick a target Medicare start month and count bridge months.
- Price COBRA vs Marketplace vs spouse plan for month 1 and for month 19 (after a typical COBRA window).
- Assign funding sleeves: HSA for qualified care, HYSA for premiums, portfolio withdrawals only on purpose.
- Set income intentionally in Marketplace years if you rely on premium credits (pension starts, Roth conversions, and capital gains all count).
- Calendar Medicare enrollment so you do not create a late-enrollment penalty problem when the bridge ends.
Worked example: 30-month bridge
Jordan retires at 62 years, 6 months with Medicare expected at 65. Bridge ≈ 30 months.
- Months 1–18: Jordan elects COBRA at $720/month ($12,960 for 18 months) because a mid-year surgery is already scheduled in-network.
- Months 19–30: Jordan moves to a Marketplace plan at an estimated $480/month after credit ($5,760 for 12 months).
- Premium total = $18,720. Jordan funds it from a $20,000 HYSA premium sleeve (covers $18,720 with a small buffer). Separately, Jordan keeps $15,000 in an HSA for deductibles and other qualified care, not for Marketplace premiums (COBRA premiums can be HSA-eligible; ordinary Marketplace premiums generally are not, absent a specific exception).
- Plus the separate cost-estimate shock reserve from the companion guide.
Jordan does not treat “I have a 401(k)” as a bridge strategy. Account balances are funding sources only after coverage type is chosen.
Checklist
- Write Medicare start month and bridge length in months.
- Compare COBRA, Marketplace, and spouse-plan premiums on the same calendar.
- Separate HSA (qualified care) from HYSA (premiums and gaps).
- Re-check subsidy math whenever income will change.
- Put Medicare enrollment deadlines on the calendar before COBRA ends.
- Pair this menu with a dollar estimate worksheet each year.
Educational only. Not insurance, tax, or benefits advice. COBRA durations, Marketplace subsidies, HSA eligibility, and Medicare enrollment rules change; confirm with your plan administrator, Healthcare.gov or your state exchange, IRS HSA rules, and Medicare.gov.