Almost always, an ACA Marketplace plan with subsidies is cheaper than COBRA — often by 50–80%. The main exception is if you're in the middle of expensive treatment and switching plans would disrupt your in-network providers.
Why COBRA is so expensive:
Under COBRA, you pay the full premium your employer was paying — both their share (typically 70–80% of total) AND your share (20–30%) — PLUS a 2% administrative fee. The average employer-sponsored family plan in 2025 cost about $25,500/year in total premiums; under COBRA, you'd pay all of that plus 2%, so roughly $2,167/month for family coverage.
COBRA also has zero subsidies (federal COBRA subsidy ended in 2021).
Why ACA with subsidies is usually cheaper:
Subsidies (Advance Premium Tax Credits) are based on your projected annual income for the year you're enrolling. If you've just lost your job:
- Your projected income is likely much lower than when you were working
- You may even qualify for the maximum subsidy or near-zero premium (if you'll have unemployment income only for several months)
- Cost-Sharing Reductions on Silver plans (under 250% FPL) further reduce your out-of-pocket
Real-world comparison example:
- Family of 4, one earner laid off in March 2026, projected 2026 income $60,000 (gross from severance + unemployment + new lower-paying job from October)
- COBRA family coverage: ~$2,167/month
- ACA Silver with CSR (income at ~225% FPL): premium ~$140/month after subsidy + CSR-reduced deductible
- Annual savings: $24,300
When COBRA might still be the right choice:
- Mid-treatment for serious condition — switching plans means restarting deductible mid-year and potentially losing in-network providers. The math:
- Spouse coverage continuation — if one spouse needs to stay on the employer plan for specific drug or specialist coverage, COBRA may be the only way to maintain that exact network
- Short gap before new job's coverage — if you start a new job in 30 days and that job has good benefits, COBRA for one month may be simpler than enrolling/disenrolling from ACA
Special Enrollment Period (SEP) for losing employer coverage:
- Loss of employer coverage triggers a 60-day SEP to enroll in an ACA plan
- The SEP starts the day before your employer coverage ends and runs 60 days after
- You can choose retroactive coverage to the day after employer coverage ended (avoiding any gap) IF you enroll in the SEP within the 60 days
The COBRA decision deadline trap:
You have 60 days after losing your employer coverage to elect COBRA. If you elect COBRA, you've used your ACA SEP — you can't switch to ACA until next Open Enrollment unless you have ANOTHER qualifying life event. So:
- First evaluate ACA pricing
- Then decide whether to elect COBRA
- Don't elect COBRA "just in case" — it locks you out of subsidized ACA
Tax considerations:
- COBRA premiums are tax-deductible only if you itemize and exceed 7.5% of AGI threshold — usually not useful
- Self-employed health insurance deduction doesn't apply to COBRA
- ACA premiums for self-employed are deductible above-the-line (more valuable)
What to do next: [Check your subsidy in 60 seconds](/aca/subsidy-calculator/), or call (866) 534-1886. If you've just lost a job, we'll do the math on COBRA vs. ACA based on your specific projected income and current treatments. Free, takes 12 minutes.