Turning 65 and Thinking of Keeping COBRA? Here’s Why It Usually Backfires

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Turning 65 and Thinking of Keeping COBRA? Here’s Why It Usually Backfires

By Daniel Petkevich

Jul 15, 2025

What to know about turning 65 and your COBRA coverage.

1. Medicare Becomes Primary, COBRA Drops to Secondary

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The moment you turn 65, Medicare is expected to pay first. If you stick with COBRA but don’t enroll in Parts A and B, your COBRA plan can refuse most of the bill—leaving you on the hook for what Medicare would’ve paid.

2. COBRA Doesn’t Protect You From the Part B Late-Enrollment Penalty

COBRA isn’t “active-employment” coverage, so it doesn’t stop the penalty clock. You have an 8-month Special Enrollment Period that starts the month after employment—or the group plan—ends to sign up for Part B. Miss it and you’ll owe an extra 10 % on your Part B premium for every 12 months you delayed, for life.

3. Enrolling in Medicare Can Cancel Your COBRA

If COBRA started before you became Medicare-eligible, the employer can end your COBRA as soon as you sign up for Part A and B. Your spouse and dependents may stay on COBRA (up to 36 months), but your own coverage usually terminates.

4. Drug Coverage? Check the Fine Print

Some COBRA plans offer “creditable” prescription coverage—others don’t. Go more than 63 days without creditable drug coverage after becoming Medicare-eligible and you’ll face a Part D penalty (1 % of the national base premium for every month you delayed). Always ask the plan for its annual “creditable-coverage” notice.

5. You Could Lose Easy Access to Medigap Later

Your six-month, one-time Medigap Open Enrollment Period starts when you take Part B. If you delay Part B while lounging on COBRA and your health changes, you may be denied a Medigap policy—or charged more—when you finally apply.

6. COBRA Is Usually Pricier Than Medicare

Most people pay the full employer premium—often $600-plus per month—while Medicare Part B runs about $185/month in 2025, and many Medigap Plan G quotes fall below $250. The math rarely favors staying on COBRA once Medicare is available. (Compare your exact numbers to be sure.)

Bottom Line

COBRA is great as a short bridge before 65, but once Medicare calls, hanging on to COBRA can leave you with denied claims, lifelong penalties, and higher premiums. Enroll in Medicare on time and consider Medigap or a Medicare Advantage plan for complete, penalty-free coverage.

Need a Penalty-Free Exit Plan?

Our licensed Medicare advocates can walk you through the timelines and run side-by-side cost comparisons—no cost, no pressure. Call 888-376-2028 today.

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Turning 65 and Thinking of Keeping COBRA? Here’s Why It Usually Backfires

What to know about turning 65 and your COBRA coverage.

1. Medicare Becomes Primary, COBRA Drops to Secondary

Speak with a Medicare Advocate

2. COBRA Doesn’t Protect You From the Part B Late-Enrollment Penalty

3. Enrolling in Medicare Can Cancel Your COBRA

4. Drug Coverage? Check the Fine Print

5. You Could Lose Easy Access to Medigap Later

6. COBRA Is Usually Pricier Than Medicare

Bottom Line

Need a Penalty-Free Exit Plan?

Speak with a Medicare Advocate

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