Is COBRA Coverage Worth the Cost?

Losing your job is tough—but losing your health insurance at the same time? That feels like a double hit. This is where COBRA coverage comes in. It lets you keep your old employer’s health insurance for a while after you leave. But here’s the real question: is it worth the steep price tag? Let’s break it down.

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What Is COBRA Insurance?

COBRA stands for Consolidated Omnibus Budget Reconciliation Act, a law passed in 1985. In plain English, it means you can temporarily keep your job-based health insurance after leaving your job. Sounds like a safety net, right? It is—but there’s a catch: you pay the full cost yourself.

How COBRA Coverage Works

COBRA doesn’t just cover you—it can also include your spouse and kids if they were already on your plan. Usually, you can keep it for 18 months, and in some cases (like divorce or death of the employee), up to 36 months.

The coverage itself doesn’t change. You get the same benefits, doctors, and network as before. The only difference? Now you’re paying the entire bill.

Also Read: How do I Get Health Insurance in California?

The Real Cost of COBRA

Here’s where the sticker shock kicks in. When you were working, your employer probably paid a big part of your premium. With COBRA, that help disappears—and you’ll often pay an extra 2% admin fee.

Average individual coverage: about $600/month
Average family coverage: over $1,700/month

For many families, that’s as much as a mortgage payment. No wonder people hesitate.

Who Qualifies for COBRA?

You typically qualify if:

You were on your employer’s health plan.
The employer had at least 20 employees.
You lost coverage because of job loss, reduced hours, divorce, or another life event.

Dependents—like your spouse or kids—may also qualify even if you don’t continue it yourself.

Also Read: What are the Best Plans for Families with Children?

Pros of COBRA Coverage

Why would anyone pay so much for COBRA? A few good reasons:

Continuity of care: Keep your doctors, even during treatment.
Same network: No need to switch specialists.
No coverage gap: You stay insured without a break.

Cons of COBRA Coverage

Now for the downsides:

Very expensive without employer support.
Temporary fix—coverage ends after 18–36 months.
No flexibility—you’re stuck with the same plan.

COBRA vs. Other Options

Marketplace (ACA plans):
Often cheaper since subsidies and tax credits may apply. Downside: you may need to change doctors or networks.

Medicaid:
If your income drops, you may qualify. Usually free or very low-cost, but benefits depend on your state.

Short-term health insurance:
Cheaper, but limited. Often doesn’t cover pre-existing conditions or essential benefits. Think of it as a band-aid, not a full solution.

When COBRA Makes Sense

COBRA may be worth it if:

You’re in the middle of ongoing treatments.
You’re between jobs and need a short-term bridge.
Your family depends on your current doctors and network.

Also Read: What do Customers Say About Kaiser Permanente Coverage?

When COBRA Doesn’t Make Sense

If you’re healthy and don’t need much medical care, the high cost may not be worth it. Marketplace or Medicaid options could save you thousands.

How to Decide if COBRA Is Right for You

Ask yourself:

Can I afford the premiums without draining my savings?
Do I have ongoing medical needs with specific doctors?
Do I just need coverage until my next job starts?

If you answered “yes” to most, COBRA might work. If not, check the alternatives.

Tips to Handle COBRA Costs

Use leftover HSA or FSA funds.
Compare with marketplace subsidies before committing.
Negotiate medical bills—many providers will lower charges if you’re paying out-of-pocket.