If you just opened your COBRA letter and the monthly price made your stomach drop, you're not alone. It's the most common reaction we hear from people who've just left a job.
Why the bill jumps
When you had an employer plan, your employer paid a big share of the premium. You only saw your part come out of your paycheck. COBRA lets you keep the same plan, but you pay the entire premium yourself, plus up to 2% for administration. Roughly speaking, employer single coverage runs around $750 a month and family coverage over $2,000, so a COBRA bill in that range is normal. It's not a mistake.
The plan is the same. The difference is that nobody is paying half of it for you anymore.
What COBRA costs, with an example
COBRA is the full price of the plan plus up to 2%. As an illustration, say the full monthly premium for your plan was $780 and your paycheck deduction was $150. Your employer was covering the other $630. Under COBRA you'd be billed up to $795.60 a month, more than five times what you saw on your pay stub, for exactly the same plan.
That math is why almost everyone is surprised. Look at the total premium on your COBRA notice, not the old paycheck number, and compare that to your other options.
Five ways to pay less
- Compare a Marketplace plan during your 60-day window. Losing job coverage gives you a special enrollment period of about 60 days. Premium help depends on your expected income, and a job change can lower what you qualify to pay.
- Price a private PPO plan if you're healthy. Private plans aren't tied to the Marketplace calendar and can cost a lot less than COBRA. They ask health questions, and not everyone is approved, so it helps to look early.
- Check whether a spouse's or a new employer's plan is available. Joining one usually has a short window, so ask quickly.
- Time it around your deductible. If you've already met most of this year's deductible, or you're in the middle of treatment, keeping COBRA for a few months can be the cheaper move. If you're healthy and haven't used much of it, switching sooner often wins.
- Don't pay for months you don't need. You generally have at least 60 days to elect COBRA, and coverage can go back to the day your old plan ended. That gives you time to compare before you commit. Ask your former employer's HR about the exact payment deadlines.
What to have ready
- Your COBRA notice, with the monthly price and the dates
- A list of your doctors and prescriptions
- An estimate of your income for the year
- The date your current coverage ends
With those four things we can put your COBRA bill next to Marketplace and private options and show you the real difference. If COBRA turns out to be the right call, we'll tell you that too. There's more on the timing in our page on health insurance after COBRA, and you may want to read should you drop COBRA? before you cancel anything.
Common questions
How much does COBRA cost per month?
COBRA is the full premium of your old plan plus up to 2% for administration. Single coverage often runs around $750 a month and family coverage over $2,000, but your notice shows your exact price.
Why is COBRA more expensive than my old plan?
It's the same plan, but your employer no longer pays its share. You pay the whole premium yourself.
Can I pay less than my COBRA bill?
Not for the same plan, but you can compare a Marketplace plan during your 60-day special enrollment period, a private PPO plan, or a spouse's or new employer's plan.
How long do I have to decide on COBRA?
You generally have at least 60 days to elect COBRA, and coverage can go back to the day your old plan ended. Ask your former employer's HR about payment deadlines.
Is COBRA ever the right choice?
Yes. If you've met most of your deductible or you're in the middle of treatment, keeping COBRA for a few months can be the cheaper move.
This article is general information, not a guarantee of coverage or pricing. Plan availability, benefits, and eligibility vary by state and individual. Some private plans are medically underwritten and do not include all ACA essential health benefits.