COBRA & Medicare
COBRA lets you continue employer coverage temporarily — but Medicare changes the equation.
The Short Version
- Medicare trumps COBRA. If you're Medicare-eligible, prioritize Medicare.
- COBRA doesn't count as creditable coverage for delaying Medicare.
- COBRA is expensive. You pay the full premium plus administrative fees.
If You're Already 65 When You Leave Your Job
- Enroll in Medicare — don't rely on COBRA as your primary coverage
- You may use COBRA as secondary coverage while you transition
- COBRA coverage may end when you become Medicare-eligible
If You're Under 65 and On COBRA
When you turn 65:
- Enroll in Medicare during your Initial Enrollment Period
- Your COBRA coverage may end (employers can terminate COBRA when you get Medicare)
- COBRA does not give you a Special Enrollment Period — only employer coverage for active workers does
The Cost Comparison
COBRA is often much more expensive than Medicare:
- COBRA: Full premium (employer no longer contributes) plus 2% admin fee
- Medicare Part B: Standard premium is $174.70/month (2024)
- Medicare Advantage plans may have $0 premiums
Don't Get Penalized
COBRA coverage does not protect you from Medicare late enrollment penalties:
- If you delay Part B while on COBRA, you'll pay 10% higher premiums for life (for each 12-month delay)
- Only coverage from an employer with 20+ employees for active workers counts
Action Steps
- If you're 65 or turning 65 soon, enroll in Medicare first
- Consider COBRA only as temporary bridge coverage or secondary coverage
- Compare the costs — Medicare is often much cheaper
- Don't delay Medicare enrollment just because you have COBRA