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After a job ends

Is COBRA Better Than Buying My Own Health Insurance?

Written and reviewed by Dick Tracy, licensed health insurance broker (NPN 20414610) · Published October 12, 2026

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Quick answer Sometimes COBRA is the better deal, and I will say it out loud: if your old employer is still paying part of the tab, or you have already spent most of this year's deductible, COBRA can beat anything I could sell you. Nationally, full price COBRA averages about $793 a month for one person and about $2,294 a month for a family (KFF's 2025 employer survey plus the 2% administration fee). But the average is not your number. Yours is printed on your election notice. The only honest way to settle this is to put that number next to a privately underwritten plan, count the deductible you already paid and the prescriptions you actually fill, and see which column wins. That is a twenty minute conversation, not a guess.

I'm Dick Tracy, an independent health insurance broker in Western New York, licensed in 25 states with 80+ carriers behind me. I came out of the healthcare side of this business, so there is no gag clause on me: you get the tips, the tricks, and the traps. Here is the first trap, and it is about me. Almost every article answering this question was written by somebody who gets paid when you leave COBRA. I get paid when you leave COBRA too. That is exactly why I run your election notice numbers in front of you instead of behind you, and why I have told people to stay put more than once.

When COBRA actually wins

Three situations, and none of them are rare.

Somebody else is still paying. Severance packages often cover COBRA for a few months, and some employers keep contributing past the last day. If your notice says $240 a month instead of $900, that is not full price COBRA and almost nothing on the open market touches it. Take it, and call me a month before the subsidy runs out, not the week after.

You are deep into your deductible. COBRA is literally the same policy, so every dollar you already put toward this year's deductible and out of pocket maximum still counts. A new plan, any new plan, starts you at zero. In October that gap alone can be worth thousands, which flips the answer for the rest of the year even when the monthly premium looks ugly.

Care is already in motion. Surgery on the calendar, a specialist you trust, a drug that sits on this formulary and nowhere cheap. Continuity is a financial asset, not a feeling. One prospect was weighing COBRA purely because it continued the hospital plan he was already being treated on, and he was reading it correctly.

The math that decides it, on one sheet of paper

Four lines, two columns, COBRA on the left and the plan you are considering on the right.

Line one, premium. The real COBRA figure off your election notice, converted to monthly. If your old payroll was weekly, multiply by 52 and divide by 12. Do not multiply by four: that is how people quietly underestimate by a month's worth every year.

Line two, deductible. What is left on the COBRA plan versus the full, untouched deductible on anything new.

Line three, drugs. Your actual prescriptions, by name and dose, priced on each plan's formulary. This is where most comparisons fall apart, and it is the line that most often rescues COBRA.

Line four, people and doctors. Who is on the plan, and whether your doctors take the new one. Verify that yourself, by phone, with the exact plan name and the exact provider. Never trust a directory screenshot.

Then add each column for the months you actually need coverage, not automatically for a year. If you start a job with benefits in March, you are buying four months, and that changes the answer completely. One client ran this and came back with "COBRA at $690 and your plan at $509 plus my prescription costs work out to be just about the same." He was right. When it is that close, the certainty of staying put is worth the difference.

What buying your own plan gives you

Outside the exchanges, in most states, individual plans are medically underwritten. The carrier prices you instead of pricing the sickest people in a community pool. For a reasonably healthy household that is usually the cheapest real PPO coverage on the table, and it does not evaporate at 18 months the way COBRA does. You own the policy. Change jobs, change states, keep the plan.

The trade is honest, so here it is: there are health questions, and a recent serious diagnosis can get you rated or declined. Anyone who skips that part is selling, not educating. There is also a layered version worth knowing about, a solid core medical plan with accident, critical illness, hospital indemnity or gap coverage built around it, so a high deductible stops being the thing that wrecks your year. In states with private underwriting, those pieces cost very little for what they do.

The third door nobody prices for you

When people ask whether COBRA beats buying their own plan, they are comparing two doors. There are three. ERISA is a federal law from 1974, and it overrides New York's community rating. I can merge an individual or a family into a pre-established ERISA group plan: group rates, a true PPO on PHCS or MultiPlan nationwide or MagnaCare in New York and New Jersey, and the policy belongs to the person, not to an employer. If there is an employer willing to be the payer, that works too. It is a simple compliance step I walk you through.

For a healthy New York family coming off a job, door three regularly beats both of the doors they were weighing. And sometimes the answer is that you do not need a group plan at all. I build the plan around the situation, and often that means customized individual coverage instead of one size fits all. A couple of years ago that approach took one household from $1,200 a month down to $379.

When I tell people to stop shopping and stay put

If the two columns land within about fifty dollars a month of each other, stay on COBRA. Certainty is worth more than that. If you are mid treatment, stay. If your employer is subsidizing it, stay until the subsidy ends.

And if your income dropped hard when the job ended and you are clearly in subsidy range, marketplace help may genuinely be the best deal available to you this year. I will tell you that, out loud, for free. It is one tool with real trade-offs: narrow networks, community rating here in New York, guessing your income twelve months ahead, and owing money back at tax time if you guess low. If you want to see roughly where your income sits before we talk, check the free 2026 subsidy cliff calculator. What I will not do is let anyone buy on a sticker price alone, on either side. That is how the math doesn't math.

Common questions about COBRA versus buying your own plan