Losing health insurance coverage—whether due to job loss, reduction in work hours, or a life change—can be stressful. Fortunately, there are temporary health insurance solutions available to bridge the gap. Two of the most common options are COBRA continuation coverage and short-term health insurance.
While both options are designed to provide coverage during transitional periods, they differ significantly in cost, coverage, and eligibility. Let’s break down the pros and cons of COBRA insurance vs. short-term health plans in 2025.
What Is COBRA Insurance?
COBRA (Consolidated Omnibus Budget Reconciliation Act) allows employees and their dependents to continue their employer-sponsored health insurance after a qualifying event such as job loss, divorce, or reduction in work hours. Coverage typically lasts 18 to 36 months, depending on the qualifying event.
Key Features:
- Continuation of your exact employer health plan
- Includes the same benefits, providers, and prescription coverage
- No need to meet a new deductible if you’ve already started the plan year
- Available for employees, spouses, and dependents
Costs:
- You pay the entire premium, including the part your employer previously covered, plus a 2% administrative fee
- Can be expensive, especially if your employer previously covered most of the cost
Pros:
- Full, comprehensive coverage
- Keeps you with the same doctors and provider network
- No coverage gaps for ongoing treatments
Cons:
- High monthly premiums (average $600–$800+/month for individual coverage)
- No access to subsidies or cost-sharing assistance
- Limited to people who were previously enrolled in an employer plan
What Is a Short-Term Health Plan?
Short-term health insurance provides limited, temporary coverage, typically for people who are between jobs, waiting for new coverage to begin, or missed open enrollment. Coverage duration varies by state but often ranges from one month up to 12 months, sometimes renewable for up to 3 years.
Key Features:
- Designed for temporary gaps in coverage
- Low monthly premiums
- Coverage starts quickly, sometimes within 24 hours
- Often does not cover pre-existing conditions, maternity, or preventive care
Costs:
- Lower premiums than COBRA (as low as $50–$200/month)
- Higher out-of-pocket costs if you need care
- You pay for services not included in the limited benefit plan
Pros:
- Affordable monthly premiums
- Easy and fast enrollment
- Flexible term lengths and cancellation options
Cons:
- Limited benefits and coverage exclusions
- May not cover prescriptions, preventive care, mental health, or maternity
- Not ACA-compliant — does not cover essential health benefits
- Denial for pre-existing conditions is possible in some states
Comparison Table: COBRA vs Short-Term Health Plans
| Feature | COBRA Insurance | Short-Term Health Plans |
| Coverage Type | Full continuation of employer health plan | Limited, temporary coverage |
| Cost | High premiums (no employer contribution) | Low premiums, high out-of-pocket costs |
| Coverage Duration | 18–36 months (varies by event) | 1–12 months (renewable in some states) |
| Covers Pre-existing Conditions | Yes | Often no |
| Enrollment Requirement | Must have had employer coverage | Open to all, no prior coverage needed |
| ACA Compliance | Yes | No |
| Subsidies Available | No | No |
| Starts When | Retroactive to the day after employer coverage ends | Usually within 24–72 hours |
When to Choose COBRA
- You’re currently undergoing treatment or managing a chronic condition
- You want to keep your current doctors, prescriptions, and coverage
- You can afford the full premium and value the continuity
- You need long-term coverage until you secure other insurance
When to Choose a Short-Term Plan
- You’re generally healthy and need only basic, temporary coverage
- You lost coverage unexpectedly and need something fast
- You’re waiting for employer or Marketplace coverage to begin
- You’re looking for the lowest-cost option to protect against emergencies
COBRA is the safer, more comprehensive choice—but also the most expensive. If you’re dealing with a medical condition, pregnancy, or ongoing treatment, COBRA may be worth the cost for the peace of mind and full coverage it offers.
Short-term plans can be useful if you’re between jobs or healthy and just need a stop-gap until longer-term insurance becomes available. However, they are not substitutes for traditional health insurance, and you should carefully review policy details before enrolling.
Whenever possible, also consider ACA Marketplace plans as an alternative—especially if you qualify for subsidies, which can make them more affordable than COBRA or short-term options.