Healthcare Costs Between Age 62 and Medicare Can Drain $89K From Your Nest Egg
Medicare provides healthcare coverage for retirees, but most people aren’t eligible until age 65. That leaves many 62-year-olds with three years of private insurance and out-of-pocket costs to pay for before the government plan takes over.
High-cost users of medical services who aren’t eligible for employer or Affordable Care Act subsidies are in danger of having to tap their nest eggs to cover $89,000 or more during that gap. Yes, really that much.
Start Your Journey: How to Avoid the Highest Medicare Premiums in 2026
Grow Rich: Start Growing Your Net Worth With Smarter Tracking
Here’s how those expenses can drain $89,000 from your nest egg, plus tips for reducing out-of-pocket costs (estimates are rounded to the nearest $100).
Health Insurance Premiums: $50,500
MoneyLion used a health insurance marketplace calculator from KFF to find out how much a 62-year-old is likely to pay for an ACA silver plan. The 2026 cost is $1,404 per month or $16,848 per year. Ignoring possible premium increases, that’s $50,544 over three years, totaling over 24% of a median earner’s income. You’ll pay even more for a gold or platinum plan.
Lower-income pre-retirees might qualify for subsidies. But those with median earnings of $69,720, per the most recent Census data, exceed the income cutoff for eligibility — 400% of the poverty level for 2026.
Out-of-Pocket Medical Costs: $31,800
Your out-of-pocket costs could run as high as $10,600 per year (including deductibles and co-insurance) with a silver plan, and that’s if you only use in-network providers for allf your care. Going out of network could leave you on the hook for much more.
Dental, Vision and Hearing Insurance: $2,500
ACA health insurance doesn’t always cover dental, vision or hearing care, so you’ll likely need to purchase separate insurance for these expenses. Monthly premiums for bundled coverage from major insurers like Cigna and Humana range from just under $50 per month to nearly $100 per month depending on the plan, for an average of about $70 per month.
Out-of-Pocket Dental, Vision and Hearing: $4,200
Most bundle plans have deductibles for dental care, if not for vision and hearing, plus waiting periods before the coverage kicks in. Although preventative dental care might be covered 100%, deductibles, co-insurance and low annual caps can leave you paying mostly out of pocket for major dental work and hearing aids.
For example, a single crown, which CareCredit estimates to average about $1,400, would nearly max out your coverage under Cigna’s Dental 1500 bundle plan, if it covered 100% of the cost. It actually covers just 50%, and only after you’ve met your deductible. Humana’s Extend 1250 bundle covers one vision exam and one hearing exam per year but provides no coverage for glasses. Discounts “might” be available on hearing aids.
How To Protect Your Nest Egg Against Healthcare Costs
One of the best ways to protect your savings against healthcare costs is to choose the right plan for the level of healthcare you anticipate needing. The $89,000 total-cost estimate for three years assumes a silver plan and enough out-of-pocket expenses to reach the maximum. However, KFF’s analysis found that gold plans often have comparable premiums, but Healthcare.gov estimates they cover 80% of expenses versus as little as 73% for a silver plan with no cost sharing.
Also consider bronze plans if you don’t expect to need much care beyond preventative services. Deductibles are much higher, but maximum out-of-pocket costs might not be. And bronze plans allow you to contribute up to $4,400 per year in pre-tax dollars to a health savings account to pay for your deductible, copayments and coinsurance. Money in the account grows tax-free. Once you turn 65, you can use the money tax-free to pay Medicare Part A and B premiums and other eligible healthcare costs.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: