What to do when a COBRA is too expensive?
Asked by: Mrs. Everette Nolan | Last update: October 23, 2025Score: 4.5/5 (1 votes)
What to do if COBRA is too expensive?
If you decide COBRA is too expensive, consider a Marketplace health insurance plan for your coverage needs.
What if I can't afford COBRA?
Instead of enrolling in COBRA continuation coverage, there may be other more affordable coverage options for you and your family through the Health Insurance Marketplace, Medicaid, or other group health plan coverage (such as a spouse's plan) through what is called a “special enrollment period.” Some of these options ...
Why is COBRA so unaffordable?
In general, COBRA is expensive because you pay both your employee side of premiums AND the employer side of premiums. For example, this could be a total of like $600 for a single person that's young.
How to transition from COBRA to marketplace?
Can I drop it during Marketplace Open Enrollment and enroll in a Marketplace plan instead? During Marketplace Open Enrollment, you can sign up for a Marketplace plan even if you already have COBRA. You will have to drop your COBRA coverage effective on the date your new Marketplace plan coverage begins.
Why is COBRA So Expensive?
Is it better to get COBRA or marketplace?
Both COBRA and ACA Marketplace plans have their advantages. COBRA lets you keep your exact employer-based plan but is often more expensive. ACA plans may be more affordable, especially with subsidies, but require choosing a new plan. The best choice depends on your financial situation and healthcare needs.
What to do after cobra insurance runs out?
When all COBRA/Cal-COBRA extensions are exhausted, you can get individual health insurance under HIPAA (see below) or you may purchase a policy on the individual market. You can compare your COBRA premium with a similar policy on the individual/family market to find out which is best for you.
What are the downsides of COBRA insurance?
Cons of COBRA Health Insurance
Some of the most notable ones include the large cost of insurance when fully paid for by the employee, the brief COBRA coverage period, and the employee relying on the employer.
What is the average COBRA payment?
Average Cost of COBRA Insurance in 2025
COBRA is a continuation of your most recent employer group health plan. According to Value Penguin, the average cost of individual health insurance in the United States is $537/month in 2025. However, costs vary significantly by state.
Is COBRA even worth it?
While it may seem like a lot of money, COBRA may actually cost you less than what you'll pay on the open market. That's because you may still get your former company's group discount. You can also use a health savings account (HSA) to pay for your COBRA premiums. They're considered a qualified medical expense.
Is there a cheaper option than COBRA?
Marketplace insurance, available through the Affordable Care Act, often offers more affordable premiums than COBRA.
What is the COBRA loophole?
If you decide to enroll in COBRA health insurance, your coverage will be retroactive, meaning it will apply to any medical bills incurred during the 60-day decision period. This loophole can save you money by avoiding premium payments unless you actually need care during this time.
What can I do instead of COBRA?
- You can enroll in a Marketplace plan within 60 days of losing your job-based coverage.
- Find Marketplace plans and prices to compare them to your COBRA coverage or offer.
- If eligible for Medicaid or CHIP, you can enroll in those programs any time and coverage can start immediately.
What if I can't pay COBRA?
If your COBRA payment is not made in a timely manner, or within the 30-day grace period then you are risking termination of your COBRA rights and coverage.
Can you get Obamacare if you are eligible for COBRA?
Does that affect my eligibility for Marketplace subsidies? You can only drop COBRA and sign up for a Marketplace plan and premium tax credits during Open Enrollment. You will have to drop your COBRA coverage effective on the date your new Marketplace plan coverage begins.
Can I decline a COBRA?
Decide not to participate in COBRA and apply for special enrollment through Covered California. Because you will be newly uninsured, you will qualify for special enrollment in a Covered California health insurance plan outside of the annual open-enrollment period.
What is the maximum COBRA out-of-pocket?
There is a $2,500 out-of-pocket maximum for individuals and an out-of-pocket maximum of $4,000 for families.
Does COBRA coverage begin immediately?
Assuming one pays all required premiums, COBRA coverage starts on the date of the qualifying event, and the length of the period of COBRA coverage will depend on the type of qualifying event which caused the qualified beneficiary to lose group health plan coverage.
Why is my COBRA insurance so expensive?
COBRA coverage is not cheap.
Why? Because you're now responsible for paying your portion of your health insurance: The cost your employer contributed to your premium, in addition to the 2% service fee on the cost of your insurance.
Does COBRA affect your taxes?
There isn't necessarily a “COBRA Tax Deduction”. You can only deduct the amount of COBRA medical expenses on your federal income tax in excess of 7.5% of your Adjusted Gross Income and then only if you itemize deductions.
Who is not eligible for COBRA?
Why would an employee not qualify to enroll in Cal-COBRA? The employee is enrolled in or eligible for Medicare. The employee does not enroll within 60 days of receiving the notice of eligibility from the employer. The employee is covered by another health plan.
Is COBRA coverage worth it?
“If you're close to meeting your deductible on your current insurance plan and you have high health care costs, it may be worth it to temporarily stay on your COBRA plan,” explains Donovan. The same holds true if you're far into your employer plan's year and have already met your deductible.
Can I go to the doctor while waiting for a COBRA?
You will be reimbursed for any medical bills that you pay out-of-pocket during this period. Contact the plan administrator for more information on filing a claim for benefits. Complete plan rules are available from the employer's benefits offices.
How do I calculate COBRA costs?
Using the information provided in Box 12 of your most recent W-2 form, labeled Code DD, you will find the total annual cost of your employer-sponsored health coverage. To determine your monthly COBRA premium, divide this annual amount by 12 and include any applicable administrative fees, which may be up to 2%.