Skyrocketing health care costs are threatening early retirement dreams for millions of Americans.
Enhanced Affordable Care Act (ACA) subsidies expired at the end of 2025 — leaving 24 million people facing a sharp rise in health insurance costs unless Congress acts.
Middle-income Americans ages 50 to 64 are most at risk, according to KFF data cited in a recent report from Kiplinger.
This group is too young for Medicare and could see health care costs double or triple.
“Half of ACA enrollees eligible for the enhanced tax credit are ages 50 to 64,” Jamie Cox, managing partner at Harris Financial Group, told Kiplinger. “It’s a budget buster. Health insurance is there to basically save your life. But it can also kill your retirement.”
Premiums for ACA Marketplace plans are expected to rise by an average of 18%.
A 50-year-old earning around $62,600 could see annual costs jump from $5,328 to $9,828. A 64-year-old close to Medicare eligibility could face premiums of $16,500 — an $11,000 increase over 2025 rates, according to KFF.
“Older marketplace enrollees face some of the largest financial burdens if the enhanced tax credits expire,” KFF policy analyst Matt McGough wrote in a blog post.
Congressional action still possible
There is hope that lawmakers may extend ACA subsidies.
On Jan. 8, the House passed a three-year extension, but the Senate is weighing a two-year plan with possible income caps and antifraud measures.
President Donald Trump has signaled he might veto any extension — leaving uncertainty for retirees and pre-Medicare Americans.
Even with a temporary extension, experts warn that health care costs remain a long-term challenge.
Financial planning even more critical
Health care costs are now a top concern for retirees and those considering early retirement.
“The cost of health care is one of the major issues and concerns for most of our clients and retirees,” Rob Williams, head of wealth management research at Charles Schwab, told Kiplinger. “So, if you’re planning to retire early, making sure you can manage and pay for any health care costs you have is significant.”
According to Fidelity Investments, 20% of all Americans and 25% of Gen Xers have never considered health care needs in retirement. Another 17% have taken no action to prepare.
Cox added that rising costs affect all Americans — not just those on the ACA Marketplace.
“This is a universal problem across both public and private health insurance,” he said, adding that even union plans are seeing premiums triple. “Some people’s premiums are going to go up from like $600 to $1,800. It’s almost like a second mortgage.”
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