Your other options if you can't afford COBRA

Why look at COBRA alternatives?

COBRA is a federal law that lets many workers keep their work health plan for a limited time after they leave a job. COBRA often costs a lot because you usually pay the whole premium yourself, which is the full monthly cost, including the part your employer used to pay. For many families that is more than they can afford, especially when a paycheck has just stopped.

COBRA is a choice, and HealthCare.gov says plainly that you do not have to enroll in it. This page walks through the main COBRA alternatives so you can compare them.

If you want the week-by-week checklist for losing a job, read our guide on what to do after losing your job and your insurance. We will not repeat that checklist here.

Buying a Marketplace plan instead of COBRA

Yes, you can buy a Marketplace plan instead of COBRA. A Marketplace plan is a health plan you buy through HealthCare.gov or your state's own site. HealthCare.gov says you can compare the cost of COBRA with Marketplace plans before you decide. It also says Marketplace plans may cost less than COBRA, especially if you qualify for savings based on your income.

Losing job-based coverage usually opens a Special Enrollment Period. That is a window outside the yearly sign-up period when you are allowed to enroll. According to HealthCare.gov, you can enroll within 60 days of losing your job-based coverage. It also says you may qualify if you expect to lose coverage within the next 60 days, so you can start early. You may be asked for a document that proves the loss, such as a letter from your employer.

One application on HealthCare.gov shows whether you qualify for savings on a Marketplace plan, for Medicaid, or for the Children's Health Insurance Program. Savings depend on your household size and your expected income for the year.

What if I already chose COBRA and want to drop it?

Slow down before you do this. HealthCare.gov says the Special Enrollment Period applies when your COBRA runs out or is no longer available. It does not apply if you voluntarily cancel COBRA before it ends.

In plain words, if you stop paying COBRA on your own, you generally have to wait for the next yearly open enrollment. Only then can you buy a Marketplace plan. The exception is when something else qualifies you, such as a new baby or a move.

There are a few other exceptions. HealthCare.gov says you can switch outside open enrollment if your COBRA is running out. You can also switch if you suddenly have to pay the full COBRA price because your employer stops paying its share. HealthCare.gov lists open enrollment as November 1 to January 15. During that time you can enroll in a Marketplace plan whatever the reason for ending COBRA.

Two simple rules help here. First, compare before you choose COBRA and not after. Second, check the start date of your new coverage before you end the old one, so you do not end up with a gap.

Medicaid as an alternative

Medicaid is a government health program for people with low incomes. You can apply for it any time of year. If your income dropped when you lost your job, you may qualify now even if you did not before. Each state sets its own rules, and in some states most adults without children cannot get Medicaid. Our guide on the Medicaid coverage gap explains what that means and what to do about it.

Applying for Medicaid costs nothing. The same HealthCare.gov application can send your information to your state's Medicaid office if you look eligible.

Can I join my spouse's plan?

You may be able to. If your spouse has job-based coverage, losing your own coverage can give you a special chance to join it, even outside the usual sign-up time. The U.S. Department of Labor says a job-based plan has to give you at least 30 days to ask for coverage. The clock starts when you lose your other coverage. That is much shorter than the 60 days on the Marketplace, so move quickly.

Call your spouse's human resources office and ask how long you have to enroll. Also ask what it would cost to add you. Then compare that number with COBRA and with a Marketplace plan. Adding a spouse can raise the monthly cost, so do the math.

Choices for a short gap in coverage

Sometimes you only need coverage to bridge a few weeks or months. You may hear about a few choices, and we explain them neutrally here. None of these is right for everyone, so read the fine print on any of them.

• A catastrophic plan is a Marketplace plan with lower monthly prices and high out-of-pocket costs. HealthCare.gov says it covers at least three primary care visits a year before you meet the deductible, and some preventive care at no cost. The deductible is the amount you pay yourself before insurance starts to pay more. You can usually buy one if you are under 30 or qualify for a hardship or affordability exemption.
• Short-term plans are sold outside the Marketplace. Because they are not Marketplace plans, the rule that all Marketplace plans must cover pre-existing conditions does not apply to them. Pre-existing conditions are health problems you already have, so ask exactly what a short-term plan excludes before you buy.
• Health care sharing ministries are groups whose members agree to share medical costs. Georgetown University's health policy center says a sharing ministry is not health insurance and that joining does not guarantee your bills will be paid.

A Marketplace plan with a high deductible can also work as a safety net. Our guide on high-deductible plans explains how they work.

Pairing a lower-cost plan with a primary care doctor

If you pick a plan with a high deductible, you may still pay for most everyday care yourself. One way to handle that is direct primary care. This is a membership with a regular doctor for a flat monthly fee, usually $50 to $200 a month.

Direct primary care is not insurance, so it does not pay for hospital stays or surgery. It can cover checkups, many sick visits and ongoing care for things like blood pressure. That can make a cheaper plan easier to live with.

Read our direct primary care guide to see how it works. You can also search our directory for cash-pay doctors. If you already have a plan with a health savings account, our guide on using an HSA for direct primary care explains the new rules.

What if I have an emergency while I sort this out?

If you think you are having an emergency, call 911 or go to the nearest emergency room right away. Emergencies include chest pain, trouble breathing, heavy bleeding and signs of a stroke.

Federal law requires an emergency room to examine you and stabilize you whether or not you have insurance. This page is general education and not medical advice, so talk with your own doctor about your care.