COBRA vs. Marketplace

How COBRA works

COBRA lets you keep the exact employer plan you had after you leave a job — same network, same doctors, and your progress toward the deductible carries over. The catch is the price. Your employer no longer pays its share, so you pick up the entire premium plus an administrative fee of up to 2% — often $600 to $700 or more a month for one person, and well over $1,000 for a family. Coverage typically lasts up to 18 months, and there are no subsidies to bring the cost down.

How a Marketplace plan works

Losing job-based coverage is a qualifying life event, so it opens a Special Enrollment Period — usually 60 days — to pick a Marketplace plan. You’re choosing a new plan, which means a new network and a fresh deductible, but there’s a major upside: because your income may have dropped, you often qualify for a premium tax credit that makes the monthly cost far lower than COBRA. The Marketplace sizes that credit on your expected income for the year, not what you used to earn.

The real difference: cost and subsidies

The deciding factor is almost always money. COBRA has no subsidy, so you pay full freight for comprehensive coverage. A subsidized Marketplace plan, by contrast, can cost a fraction of that while your income is low. What you give up by switching is continuity — your specific plan, network, and any deductible you’ve already met. So the trade is straightforward: COBRA buys you sameness, the Marketplace usually buys you savings.

Which is right for you

For most people leaving a job, a subsidized Marketplace plan wins on price. COBRA makes sense in specific cases: you’re in the middle of treatment and need to keep your exact doctors and plan, you’ve already met your deductible for the year, or your income is too high to qualify for a subsidy. One timing point matters: you have 60 days to elect either option, but if you take COBRA and later want to move to a Marketplace plan, you generally can’t until your COBRA runs out or the next Open Enrollment — voluntarily dropping COBRA isn’t a qualifying event. Decide deliberately at the start.

The bottom line

Compare the total cost both ways before you choose. A Marketplace plan is usually cheaper thanks to subsidies, while COBRA preserves your exact coverage when continuity is worth paying for. To see what a Marketplace plan would actually cost you, you can compare options through PlanMatch Health.