Why is COBRA insurance so expensive?
Asked by: Mafalda Kreiger | Last update: December 21, 2025Score: 4.2/5 (42 votes)
Why are COBRA premiums so expensive?
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.
Is there a cheaper alternative to COBRA?
Not only are Marketplace health insurance plans typically less expensive than COBRA, most Marketplace applicants (91% in 2022) qualify for at least some government subsidy to help pay their premiums. The amount of the subsidy depends on your income, where you live and the size of your family.
Is COBRA even worth it?
If your medical expenses are going to be more than the COBRA premiums and you are close to meeting your deductible or out-of-pocket maximum, then it might be worth it to stay on COBRA.
What do I do if COBRA is too expensive?
Go onto the gov exchange after your employer stops paying for cobra. The employer does not pay for COBRA. The entire cost is paid by the employee. And check out the healthcare marketplace right away. It is very likely that you will find equivalent (or better plans) for less than COBRA once the subsidy is factored in.
Why is Cobra so Expensive?
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 ...
What are the disadvantages of COBRA coverage?
- COBRA can be expensive, especially compared to the premiums you were paying before your qualifying event. ...
- COBRA does not apply to all employer-sponsored health plans—in particular, those organizations with fewer than 20 employees may have no requirements. ...
- Even if you get an extension, COBRA is only temporary.
Is it better to go with 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 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 is the average cost of cobra insurance per month?
COBRA coverage is not cheap.
A COBRA premium can cost on average $400 to $700 a month per person.
How to avoid cobra insurance?
- 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.
- The employee is fired for gross misconduct.
Can I switch from COBRA to private insurance?
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.
Who pays for Cobra insurance?
COBRA and Cal-COBRA
COBRA allows former employees, retirees, and their dependents to temporarily keep their health coverage. If you get COBRA, you must pay for the entire premium, including any portion that your employer may have paid in the past.
What insurance is cheaper than COBRA?
COBRA insurance lets individuals continue their employer-sponsored health coverage for a limited period after leaving their job. Alternatives to COBRA may offer more affordable or appropriate coverage. These include the health insurance marketplace, short-term insurance, Medicaid, or a new employer's plan.
Can you cancel a COBRA at any time?
Yes, you can cancel COBRA coverage at any time. However, be aware that cancellation does not trigger a special enrollment period for new health insurance.
Is COBRA cost 102%?
COBRA premiums are calculated at 102% of the Basic premiums, but some carriers may charge less than these maximum amounts. 1These premiums cover all Kaiser out-of-state areas.
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 a company refuse to offer COBRA?
You do not have to offer COBRA coverage to any of the following: an employee who is not yet eligible for your group health plan. an eligible employee who declined to participate in your group health plan. an individual who is enrolled for benefits under Medicare.
What is the 105 day COBRA loophole?
So, if you maxed out the 60 day election period plus the 45 day payment period, you could actually go 105 days without paying for the coverage.
Why is my Cobra insurance so expensive?
You should expect COBRA insurance costs to be substantially higher than what you paid as an employee because your employer is no longer required to pay a share. In 2023, employees paid an average of $145 per month for an individual plan and $548 per month for a family plan, according to KFF.
Can I use COBRA if I quit my job?
Whether you quit, get fired or are laid off, you may be able to choose your former employer's health plan under a federal law called COBRA. That stands for Consolidated Omnibus Reconciliation Act. It's available if: You were enrolled in an employer-sponsored medical, dental or vision plan.
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.
What is the average cost for cobra insurance?
The average monthly cost of COBRA Insurance premiums ranges from $400 to $700 per individual.
What is not covered under COBRA?
COBRA also does not cover plans that provide only life insurance or disability benefits, as those benefits are not considered “medical care.”
Can I keep COBRA when I get a new job?
Yes, you can keep COBRA coverage even when your new employer offers health insurance. The decision to retain COBRA or opt for the new employer's plan depends on your personal circumstances, such as comparing benefits and costs. There's no federal mandate to cancel COBRA upon obtaining new job-based insurance.