COBRA Alternatives: Affordable Care Act, Private Short-Term Medical and Medicare
COBRA allows you to keep your employer-sponsored health insurance after leaving a job, but it’s often expensive and temporary. Without employer contributions, you’re responsible for the full premium plus a 2% administrative fee, which adds up quickly.
Individual COBRA premiums typically range from $400 to $700 per month, and family coverage costs even more. Since COBRA lasts only up to 18 months, finding a long-term health plan is essential.
Why Consider Alternatives to COBRA?
COBRA isn’t always the best option, especially due to its high cost. Paying the full premium plus fees can make it unaffordable for many. If the price is a concern, other health insurance options—such as ACA marketplace plans, short-term insurance, or Medicaid—may provide more affordable and lasting coverage.
Coverage Solutions When You Lose Insurance
Temporary medical insurance costs vary by age and state, and private plans are available with a range of coverage options to fit different needs and budgets.
- Private Affordable Care Act (ACA) plans cover pre-existing conditions and may offer subsidies to lower costs.
- Private short-term health plans can be a lower-cost option but typically do not cover pre-existing conditions.
- State Medicaid programs provide free or low-cost health coverage for eligible low-income individuals, families, some seniors, and people with disabilities.
Affordable Care Act Option To Employer COBRA
Marketplace insurance, available through the Affordable Care Act (ACA), is a popular alternative. It often provides more affordable options compared to COBRA, with a range of plans to suit different needs and budgets. The marketplace allows for comparison of plans based on coverage, cost, and network of providers. Enrolling during the open enrollment period or qualifying for a special enrollment period due to life events such as job loss ensures that individuals can find coverage that meets their needs.
- Premiums tend to be lower overall.
- Up to 80% of individuals who apply for a marketplace plan receive a government subsidy to offset premium costs.
- Outside of the annual Open Enrollment period, you can enroll in a marketplace plan following select qualifying events, including within 60 days following the loss of a job.
- Plans have few limits based on age, gender and health.
- Your coverage lasts for as long as you pay your premiums.
- You have access to a diverse array of plans and a wide network of providers.
Learn about saving by enrolling in an Affordable Health Care plan.
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With over 20 years of experience, we specialize in helping individuals with their options, including COBRA, private temporary insurance, Affordable Care Act plans, and Medicare, to find the most effective and affordable health coverage solutions.
Ending COBRA Is Not a Qualifying Event for ACA Enrollment
Once you enroll in COBRA, it becomes your health insurance plan under the Affordable Care Act (ACA). Ending COBRA coverage does not qualify you for a Special Enrollment Period to switch to a new ACA plan. You may only change to an ACA plan during the annual Open Enrollment Period (Nov 1 – Jan 15) or if you gain access to a new employer-sponsored health plan.
Short-Term Health Insurance Alternatives To COBRA
Short-term health insurance provides a valuable temporary solution for individuals transitioning between jobs or health plans. Often more affordable than COBRA, these temporary health plans may offer a viable option for those in need of immediate, but will provide less comprehensive coverage.
Ideal for individuals in good health seeking essential coverage for a brief period, short-term insurance can bridge the gap efficiently.
However, these plans typically exclude pre-existing conditions and might not deliver as many of the benefits found in marketplace or employer-sponsored health insurance options.
Temporary Coverage Options
There are several types of private health insurance options available instead of employer COBRA.
- Short Term Medical Insurance offers coverage for new illnesses and injuries, with plans starting at $80 per month. Coverage can begin as soon as midnight on the same day, and it helps protect against unexpected medical expenses.
- Accident Only Insurance covers healthcare costs resulting from accidents, starting at $44 per month. This plan also includes Telehealth services, providing access to doctors for common issues, and coverage can begin as early as midnight.
- Limited Indemnity Insurance provides basic medical coverage for people who may not have access to comprehensive health insurance. It also includes Telehealth services and can start the same day.
About Short-Term Plans
In some states, obtaining term health insurance may require joining a professional organization. Some coverage options may auto-enroll you into an organization if applicable based on your location.
Medicaid and Other Government Assistance Programs
For individuals with limited income, Medicaid provides a no-cost or low-cost alternative. Eligibility varies by state but is generally based on income and family size. Other government programs, such as the Children’s Health Insurance Program (CHIP), offer coverage options for those who may not qualify for Medicaid but still need affordable solutions.
Check your state of residency for links to Medicaid options in your state.
How to Apply for a New Health Insurance Plan
Choosing a health plan other than employer COBRA requires understanding the application process, required documents, and deadlines to avoid gaps in coverage. Here’s how to apply for different health insurance options:
- ACA Marketplace Plans:
- Apply during Open Enrollment (Nov 1 – Jan 15) or a Special Enrollment Period if you qualify.
- Gather necessary documents, including proof of income, household size, and prior coverage details.
- Check if you qualify for subsidies to lower your monthly premium.
- Apply through health marketplace or your state’s marketplace.
- Medicaid:
- Enrollment is open year-round.
- Provide proof of income, residency, and household size to determine eligibility.
- Apply through your state’s Medicaid office or online portal.
- Short-Term Health Insurance:
- Applications can be submitted anytime, with coverage starting as soon as the next day.
- Minimal documentation is required, though plan availability varies by state.
- Compare plans from private insurers to find one that fits your budget and needs.
Reviewing your options and applying on time will help you avoid coverage gaps and find a plan that meets your needs.
COBRA COSTS
$400 - 700
on average, per month
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Some Plans As Low As $40/month*
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*Based on age and state availability
Types of Short-Term and Supplemental Health Plans
When COBRA isn’t the right fit, private health insurance options can provide flexible and affordable coverage. These plans include short-term medical insurance for unexpected illnesses and injuries, accident supplements to help with emergency costs, and limited indemnity plans for essential healthcare needs. Whether you need temporary coverage, accident protection, or a budget-friendly alternative, these options can help bridge the gap and keep you covered.
Short Term Medical
Next Day Coverage
Flex Term Health Insurance helps to protect you from the medical bills that can result from unexpected Injuries and Sickness. Safeguard your financial future with Flex Term Health Insurance. It provides the peace of mind and health care access you need at a price you can afford. Read more about Flex Term Health.
Accident Supplement with Telehealth
Accident Only Coverage
Accidents happen, and this plan can help with reimbursing some of the costs you incur so you can focus on getting care. Comprehensive Accident Medical (CAM) can help you pay for the treatment you need resulting from injuries or accidents. Learn more about Accident coverage.
Limited Indemnity with Telehealth
Fixed Monetary Benefit
Core Health Insurance provides guaranteed acceptance Limited Indemnity Medical coverage for your basic medical needs, helping to provide a medical option for people who do not have the luxury of being covered by a comprehensive health insurance plan.
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Accident Only plans start at $44*
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Temporary health insurance is a popular, affordable solution to cover gaps in coverage while you are between Major Medical plans.
*Eligibility for short term medical insurance is based on age and state availability.
Frequently Asked Questions
How does marketplace insurance compare to COBRA in terms of cost?
Marketplace insurance, available through the Affordable Care Act, often offers more affordable premiums than COBRA. The cost difference can vary based on the chosen plan, location, and income, as subsidies may reduce premiums for marketplace plans.
Without a subsidy, costs between both forms of coverage tend to be similar. COBRA plans tend to have the upper hand if:
- You’ve fulfilled the deductible for your former employer’s group health insurance plan for the year, and you want to continue coverage for the next few months.
- You wish to retain the same network of healthcare providers; switching to marketplace insurance may mean changing providers or not receiving the same degree of coverage.
- Your former employer’s group health insurance plan provides better coverage for pre-existing conditions and any prescription medications you take.
Can I switch from COBRA to marketplace insurance?
Yes, but you may only switch from COBRA to marketplace insurance during the open enrollment period or if you qualify for a special enrollment period due to certain life events like losing COBRA coverage.
What are short-term health insurance plans?
Short-term health insurance plans provide temporary coverage, ideal for bridging gaps between longer-term insurance solutions. These plans can be more affordable but usually offer less comprehensive coverage and may not cover pre-existing conditions.
Who is eligible for Medicaid?
Eligibility for Medicaid varies by state but generally depends on income, family size, and specific circumstances like pregnancy or disability. It’s designed for individuals with limited income and resources.
When can I enroll in a new employer’s health insurance plan?
Enrollment periods for new employer-sponsored health insurance plans can vary. Typically, coverage begins within the first month of employment, but some employers may have waiting periods. Check with your new employer for specific enrollment details.
How do I choose the right health insurance alternative?
Consider your healthcare needs, budget, and the coverage details of each option. Evaluate factors like coverage duration, network providers, premiums, deductibles, and out-of-pocket costs to find a plan that fits your situation. It’s always important to consult a health insurance specialist when you need COBRA help.
