After a job loss · Updated October 24, 2026
COBRA or a marketplace plan: which costs less?
A marketplace plan usually costs less than COBRA, because COBRA charges the full premium your employer used to share and the marketplace credit can cover most of a plan's price. COBRA wins when you've already met most of this year's deductible, you're mid-treatment with doctors a new plan wouldn't cover, or your income is too high for a credit.
Cost over the months you need
Worked example: a 52-year-old in Mecklenburg County, North Carolina, with a $780 COBRA notice, $2,200 of a $3,000 deductible already met, six months to cover and about $1,500 of expected care. Income for the year is $55,000, which gives a credit of about $422 a month on the benchmark silver plan at 2026 prices.
A simplified estimate: it counts bills up to the deductible and ignores coinsurance and copays after that. HealthInsurance.help is not a government site or an insurer.
Next: price the real plans
Put your ZIP code into HealthCare.gov's plan browser, or your state exchange's if it runs its own, and check your doctors and prescriptions there before you compare with your COBRA notice. Losing job-based coverage gives you 60 days to pick a plan. If you want a person to walk you through it, trained Navigators help for free; find one at localhelp.healthcare.gov.
The rules that decide it
COBRA lets you keep your employer's plan for 18 months after a layoff or cut in hours (36 months for some family events), at up to 102% of its full cost. It applies to private employers with 20 or more employees and to state and local government plans. Many states have their own continuation laws for smaller employers.
You have at least 60 days to elect it, and if you do, coverage reaches back to the day the job plan ended. That gives you a free look: if nothing happens in those weeks, you can let the election window pass and pick a marketplace plan instead. The marketplace special enrollment period also runs 60 days from losing job coverage, and you can pick a plan up to 60 days before the loss if you know it's coming.
The trap is the other direction. Once you're on COBRA, dropping it or stopping payments mid-year is not a qualifying event. You'd stay on COBRA, or go uninsured, until open enrollment.
Income for the year, not the month
The marketplace credit is based on income for the whole calendar year, including the paychecks you got before the layoff and any severance. Someone who earned $40,000 by June and nothing after has $40,000 of income for the year, not zero. Unemployment benefits count too. If the year's income will be very low, check Medicaid, which looks at current monthly income instead.
When COBRA is the better buy
- You've met most of your deductible or out-of-pocket maximum this year, and you expect more care before December.
- You're in the middle of treatment, a pregnancy or a surgery schedule with doctors outside the networks available to you on the marketplace.
- Your income for the year will be over 400% of the poverty line, so there is no credit and the marketplace plan costs full price too. Compare the two full prices.
- You need only a month or two of coverage before a new job's plan starts.
Sources: U.S. Department of Labor, An Employee's Guide to Health Benefits Under COBRA; 26 CFR 54.4980B-6; 45 CFR 155.420 (special enrollment periods); IRS Rev. Proc. 2026-26; CMS individual market plan file, plan year 2026.
Questions people ask
How long do I have to decide on COBRA?
At least 60 days from the later of the date your election notice is given or the date your coverage would end. If you elect in that window, coverage is retroactive to the day your job coverage ended, and you have 45 more days after electing to make the first payment.
Can I drop COBRA and switch to a marketplace plan later?
Only at certain times. Within 60 days of losing job coverage you can still pick a marketplace plan. After that, dropping COBRA or stopping payment mid-year does not open a special enrollment period, so you wait for open enrollment (November 1 to January 15 on HealthCare.gov for 2027). Running out of COBRA at the end of 18 months does open one.
Does being offered COBRA stop me from getting a premium tax credit?
No. Being eligible for COBRA does not block the credit. Enrolling in COBRA does, for the months you are on it.
How much does COBRA cost?
Up to 102% of the full premium, including the share your employer used to pay. During the 11-month disability extension it can be 150%. Your election notice lists the exact amount.