COBRA vs. Marketplace Insurance After a Job Loss: Which One Actually Costs Less

Losing a job triggers a 60-day window to elect COBRA continuation coverage, and a separate Special Enrollment Period to buy an ACA Marketplace plan instead. Both keep you insured, but which one actually costs less changed materially in 2026 — and the answer now depends heavily on your income.

What COBRA Actually Costs

COBRA doesn’t reduce your premium at all — it lets you keep your exact former employer plan, but you now pay 100% of the premium your employer used to subsidize, plus up to a 2% administrative fee. With average total employer-sponsored premiums running roughly $24,000 a year for family coverage, that works out to COBRA costs in the range of $1,500 to $2,200 a month for a family and roughly $600 to $900 a month for individual coverage — the full sticker price of employer insurance with no employer contribution.

What Marketplace Coverage Costs After the 2026 Subsidy Cliff

Marketplace premium tax credits got meaningfully less generous in 2026: the enhanced subsidies that had been in place since 2021 expired on December 31, 2025, and Congress didn’t renew them. That brought back the hard income cliff at 400% of the federal poverty level — cross it, and you lose premium tax credit eligibility entirely rather than seeing a gradual phase-out, as covered in our ACA Marketplace subsidies 2026 guide. If your household income (which drops when you lose a job) still falls under that 400% line, you can still get a real subsidy: KFF estimates the average annual premium for subsidized enrollees is around $1,904 for 2026, or roughly $159 a month. If your income puts you above the cliff, or you’re in a state that didn’t expand Medicaid and your income is unusually low, you could be paying the unsubsidized benchmark Silver premium, which averages about $625 a month for a 40-year-old before any credit.

The Actual Decision

For most people who lose employer coverage in 2026, Marketplace comes out cheaper than COBRA if their post-layoff household income still qualifies for a meaningful subsidy — often by a wide margin. COBRA usually only wins when you’ve already met most of your deductible for the year and have ongoing treatment or a scheduled procedure where switching plans and networks (and restarting a new deductible) would cost more than the COBRA premium difference. Run both numbers against your actual expected income for the rest of the year, not last year’s income, before you elect either one — the 60-day COBRA election window gives you time to compare before committing.

Written by Samuel, Certified Public Accountant

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