COBRA vs marketplace after a job loss

COBRA keeps your current doctors and plan; the marketplace can be much cheaper because of premium tax credits. The right answer depends on your income, your network and how quickly you need coverage.

What COBRA is

COBRA lets you keep a former employer's group plan for a limited period (often 18 months), but you pay the full premium the employer and employee together were paying, plus up to a 2% administrative fee. The coverage itself does not change — same network, same deductible, same prescriptions.

What the marketplace offers

Losing job-based coverage is a qualifying life event: you get a special enrollment period (generally 60 days) to buy a marketplace plan. If your income qualifies, a premium tax credit can make a silver plan far cheaper than the COBRA premium — and cost-sharing reductions can lower the deductible further at lower incomes. The trade-off: a new network, new deductible, and the plan must be chosen quickly.

How to compare fairly

Compare annual cost, not monthly premium: premium × 12 + deductible you expect to use + copays + prescriptions, for the doctors and hospitals you actually see. A COBRA plan with a low premium but out-of-network doctors after a move is not cheaper in practice.

Practical steps

1. Get the COBRA election notice and premium in writing; note the deadline (often 60 days).
2. Start a marketplace application the same week — the SEP clock is short.
3. Estimate income for the year; the subsidy depends on annual modified adjusted gross income.
4. Check doctors, hospitals and drugs against both options before electing.
5. Keep proof of the coverage loss for the marketplace application.

You can choose either — you cannot have both for the same coverage period, and dropping COBRA later does not reopen a special enrollment period. Decide with the full-year numbers.

Written and maintained by the US Health Insurance Marketplace data team · last reviewed 2026-10-24 · sources and methodology.