How to Know If COBRA Is Worth It

Calculate if COBRA health insurance is worth the cost by comparing premiums, coverage, and alternatives after job loss.

  1. Calculate your true COBRA cost. Add up the full monthly premium (your old employer's portion plus yours, plus a 2% administrative fee). COBRA typically costs $600-$1,800 per month for individual coverage and $1,500-$2,200 for family coverage as of 2026. You have 60 days from losing coverage to decide, and coverage is retroactive if you elect it.
  2. Price marketplace alternatives. Check Healthcare.gov or your state marketplace for plans available in your area. Compare monthly premiums, deductibles, and out-of-pocket maximums. Job loss qualifies you for a special enrollment period, so you're not stuck waiting for open enrollment.
  3. Factor in your current medical situation. If you're in the middle of treatment, have established relationships with specialists, or take expensive medications, staying on your current plan through COBRA might be worth the premium. Switching plans could mean new deductibles, different drug formularies, or losing access to your current doctors.
  4. Consider short-term vs. long-term needs. COBRA lasts up to 18 months (sometimes 36 months in specific situations like divorce). If you expect to find new job-based coverage within a few months, COBRA might make sense for continuity. If you're looking at a longer gap, marketplace plans or short-term medical insurance might be more cost-effective.
  5. Check if you qualify for marketplace subsidies. Income-based subsidies can significantly reduce marketplace plan costs, but they're not available for COBRA. If your household income is below 400% of the federal poverty level (roughly $60,000 for individuals or $124,000 for a family of four in 2026), marketplace plans may cost much less than COBRA.
  6. Make your decision before the deadline. You have 60 days from receiving your COBRA notice to elect coverage, and 45 days to make your first payment. Don't wait until day 59 — give yourself time to gather documents and process payments. Remember, you can always drop COBRA later if you find better coverage, but you can't add it back once the window closes.