💸 My COBRA Costs Too Much! (What to Do Instead)

Let’s start with the truth: COBRA can be a safety net. But it’s also a flaming pile of paperwork wrapped in a premium most can’t afford.

Every week, someone messages me saying, “I just got laid off and my COBRA quote is $900 a month. Is that normal?”
Yes. Unfortunately, it’s very normal.
And yes, there are better options.

So, let’s talk about why COBRA is so expensive, who it’s really for, and what you can do instead that actually makes financial sense.

🩺 What COBRA Actually Is (and Isn’t)

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which is just government-speak for:
“You can keep your employer’s health insurance… if you pay for the whole thing yourself.”

Here’s how it works:

• When you leave a job (voluntarily or not), you can usually stay on their employee group plan for up to 18 months.

• The catch? You pay 100% of the premium, plus up to a 2% administrative fee.

Your employer used to pay part of that bill. You may not have even known how much it really cost because it was automatically deducted from your paycheck.
Now? You see the full number in all its horrifying glory.

💰 Why COBRA Costs So Much

Let’s say your employer was paying $600 a month and you were paying $200 through payroll.
That means the plan’s total premium was $800 a month.

When you go on COBRA, guess who’s paying the full $800 (plus the 2% admin fee)?
You.
That’s $816 a month, for the exact same coverage you had when your employer was footing the bill.

You’re not getting ripped off. You’re just finally seeing the true cost of the coverage your company was subsidizing.

🧾 The Math Nobody Shows You

Here’s the average national COBRA cost:

• Single coverage: $641/month

• Family coverage: $1,812/month

(Source: Kaiser Family Foundation)

That’s $21,744 a year just to keep your family insured without employer help.
And if you’re between jobs, retired early, or freelancing, that number hits really hard.

🧨 The Hidden Problems With COBRA

It’s not just about price. COBRA also comes with some sneaky traps that people don’t realize until it’s too late.

1. It’s retroactive and confusing

You technically have 60 days to decide whether you want COBRA after you lose your job.
But coverage is retroactive. Meaning, if you get sick on Day 30, you can go back, enroll, and your coverage starts from the first day you lost coverage. Here’s the catch: you’ll owe the full premium for the entire month. Or two. Ouch.

2. It’s not always accepted long-term

Some employers change carriers or plan structures during renewal, leaving former employees scrambling.

3. It doesn’t qualify for ACA subsidies

COBRA isn’t an ACA (Healthcare.gov) Marketplace plan, which means no income-based discounts or tax credits.
You’re paying sticker price and that sticker is ugly.

👀 Who Should Actually Take COBRA

Believe it or not, there are times when COBRA makes sense. Short term.

Take COBRA if:
✅ You’re in the middle of major treatment (like surgery, cancer care, or pregnancy).
✅ You’ve already hit your deductible or out-of-pocket max for the year.
✅ You’ll be starting a new job soon and just need a month or two of bridge coverage.

That’s it.
If none of those apply to you, you’ve got better options.

🚀 Better Options Than COBRA

Option 1: Marketplace (ACA) Plans

If you lose employer coverage, you get a Special Enrollment Period for 60 days from the lost coverage on the ACA Marketplace; meaning you don’t have to wait for Open Enrollment to sign up.

ACA plans are income-based.
If you’re between jobs, your income probably dropped. That means you could qualify for subsidies that drastically reduce your premium.

Example:
Someone earning $40,000/year might see ACA premiums as low as $150–$250/month instead of $800–$1,000 for COBRA.

👉 Bonus: You can choose a different plan that actually fits your doctors and prescriptions, not just the one your old company picked.

Option 2: Private, Non-Marketplace Plans

If your income is too high for subsidies or you want more control, non-marketplace coverage can sometimes be more cost-effective, especially if you’re healthy and don’t need a massive network.

Private plans can include:

• Fixed-benefit plans

• Short-term plans (up to 12 months)

• Health indemnity plans

• Medically underwritten plans

These plans are designed to give you catastrophic protection without the inflated COBRA premium.

Average cost: around 8x your age, depending on your health and state.

Option 3: Pair an ACA or Private Plan With Supplemental Coverage

Want the best of both worlds?
Add supplemental benefits (like accident, hospital, or critical illness coverage) for around $150/month.

These plans can help pay your deductible and out-of-pocket costs if something happens, so your “affordable” plan doesn’t suddenly become a financial gut punch.

It’s one of my favorite strategies for people leaving jobs or starting businesses. It keeps you protected without draining your savings.

💬 The Insured AF Reality Check

COBRA’s not evil. It’s just expensive, outdated, and rarely the best long-term move.

If you’re leaving a job or getting hit with a COBRA quote that makes you choke on your coffee, remember this:

• You have options.

• You can often cut your costs by 50% or more with an ACA or private plan.

• You don’t have to panic. But you do need to act fast.

The worst thing you can do is let those 60 days pass without exploring your alternatives.
That’s how people end up uninsured. Or stuck paying mortgage-sized premiums because they didn’t know what else existed.

💡 TL;DR

COBRA lets you keep your old job’s insurance but at full price.

• You pay 100% of the premium + 2% admin fee

• Average cost: $641 (single) / $1,812 (family) per month

• It’s retroactive, not subsidized, and not a long-term fix

✅ Use COBRA if you’re in treatment, pregnant, or starting a new job soon.
✅ Otherwise: look at ACA or private plans + supplemental coverage.

Because paying thousands more for the same coverage isn’t loyalty — it’s lunacy.

📘 Resources & Next Steps

👉 Message me if you just lost coverage and want to see your real options before you sign that COBRA form.

📘 The Health Insurance Solution — Understand how the system really works.
📓 The Health Insurance Workbook — Use it to plan your next step during Open Enrollment.

Because being Insured AF means you know what’s coming — and you never overpay for it.