COBRA vs Medicare at 65

COBRA lets you keep your old employer's health plan after the job ends, usually for 18 months. Before 65, that can be a lifeline. At 65 or older, it is usually the wrong main coverage, and choosing it over Medicare can cost you money twice: once in bills COBRA does not pay, and again in a Part B penalty that lasts for life.

Should you take COBRA or Medicare if you retire at 65 or older?

In most cases, Medicare. Once you are eligible for Medicare, Medicare pays first and COBRA pays second. Medicare.gov warns that if you have COBRA and are eligible for Medicare but not enrolled, COBRA may pay only a small portion of your care, and you may have to pay most of the costs yourself.

That is the key difference from coverage based on a current job. While you are still working for an employer with 20 or more employees, the employer plan pays first, and delaying Part B can make sense. Our employer coverage vs Medicare comparison covers that case. Once the job ends, the rules flip, even if the plan itself does not change.

Why doesn't COBRA protect you from the Part B penalty?

Because COBRA is not coverage based on current employment. Medicare's Special Enrollment Period for people with job-based coverage lasts 8 months, starting the month after the job or the coverage ends, whichever comes first. The clock runs whether or not you take COBRA.

Here is how the dates work:

Waiting past the window can bring a Part B late enrollment penalty of 10% for each full 12-month period you could have had Part B but did not. It is added to your premium for as long as you have Part B. Our Part B penalty calculator shows what it could cost.

How much does COBRA cost compared with Medicare?

COBRA is usually much more expensive than you expect. Federal law lets the plan charge up to 102% of the full premium, which includes the share your employer used to pay. KFF found the average single-coverage employer premium was $9,325 a year in 2025, about $777 a month, while the average worker paid only $1,440 of it.

Medicare costs money too. The standard 2026 Part B premium is $202.90 a month, and most people add a Medigap policy or a Medicare Advantage plan plus drug coverage. Still, for one person 65 or older, Medicare with a supplement is often far less than a full COBRA premium, and it is coverage that does not run out in 18 months.

When does COBRA still make sense?

COBRA still has real uses around 65:

• A spouse or dependents under 65. Medicare covers only you. Your spouse can keep COBRA on the same plan with the same doctors. Their COBRA rights are separate from yours, and in some cases COBRA can last up to 36 months.
• The months before you turn 65. If you retire at 63 or 64, COBRA can bridge to Medicare. Compare it with the Marketplace first; see ACA Marketplace vs COBRA and our page on health insurance before 65.
• A short overlap you plan for on purpose. Some people keep COBRA briefly alongside Medicare. If you do, know that COBRA pays second and may pay little.

If you already had COBRA when you signed up for Medicare, Medicare.gov says your COBRA will probably end once you sign up.

What about prescription drug coverage?

If your COBRA includes creditable drug coverage, you are protected from the Part D penalty while you have it. Medicare says you get a Special Enrollment Period to join a Part D plan without a penalty when COBRA ends, generally within 2 full months after the month it ends.

Ask the plan for its yearly creditable coverage notice and keep it. In practice, most people leaving a job at 65 or older pick a drug plan, or a Medicare Advantage plan with drugs, at the same time they start Part B.

What mistakes do people make with COBRA and Medicare?

The biggest mistake is choosing COBRA and skipping Part B, then learning COBRA expected Medicare to pay first. That can leave you with most of a hospital bill.

Other common mistakes:

1. Waiting for COBRA to run out before signing up. By then, the 8-month window may be long gone.
2. Missing the Medigap window. Your one-time, 6-month Medigap Open Enrollment Period starts the first month you have Part B and are 65 or older. In Nebraska, after that window, companies may turn you down for health reasons.
3. Forgetting HSA rules. If you sign up after 65, Part A can be backdated up to 6 months (but not before the month you turned 65), so Medicare advises stopping HSA contributions 6 months before you apply. See HSAs and Medicare.
4. Dropping a spouse's coverage by accident. Decide on your spouse's plan before you cancel anything.
5. Not writing down dates. Keep the date your job ended and the date your coverage ended. Social Security may ask for proof of your job-based coverage.

If you are mapping out turning 65 more broadly, our turning 65 checklist walks through it month by month.

Who can help you check your dates?

Medicare.gov and 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, 7 days a week (TTY 1-877-486-2048), can answer enrollment questions. Social Security handles Part B sign-up at SSA.gov. Nebraska SHIP (formerly SHIIP) gives unbiased counseling at 1-800-234-7119. See our page on SHIP and local help.

If you want help lining up your Medicare start date, your COBRA end date and a younger spouse's coverage, talk to me. My help costs you nothing.