Is COBRA or ACA cheaper?

For most people with household income under 400% of the federal poverty level, an ACA Marketplace plan is cheaper, often by hundreds of dollars a month, because the premium tax credit applies to Marketplace plans but not to COBRA. COBRA can be the better deal if you have already met a large deductible this year, are mid-treatment with doctors outside Marketplace networks, or your employer subsidizes COBRA as part of severance.

Can I switch from COBRA to an ACA plan?

Yes, but timing matters. You can choose a Marketplace plan within 60 days of losing job-based coverage even if you were offered COBRA. If you enroll in COBRA and later drop it voluntarily, that does not open a special enrollment period; you would have to wait for open enrollment (November 1 to January 15). If your COBRA coverage runs out, that does open one.

Can I get an ACA subsidy if I am eligible for COBRA?

Yes. Being offered COBRA does not affect your premium tax credit. Being enrolled in COBRA does: you cannot get a Marketplace subsidy for months you are covered by COBRA.

How long do I have to decide on COBRA?

You have 60 days from the later of the date your coverage ends or the date you receive your COBRA election notice. If you elect, coverage is retroactive to the day your job coverage ended, and your first premium is due within 45 days of electing.

What does COBRA cost in 2026?

Up to 102% of the full premium. KFF's 2026 survey puts the average employer plan at $9,804 a year for single coverage and $28,303 for family coverage, about $833 and $2,406 a month on COBRA.

I am turning 65. Should I take COBRA?

Usually not as a substitute for Medicare. COBRA does not count as coverage from current employment, so waiting to enroll in Medicare Part B while on COBRA can lead to a late-enrollment penalty and gaps in coverage. Enroll in Medicare when you are first eligible and check how COBRA coordinates with it.

Insurance

COBRA vs ACA in 2026–2027: Which Is Cheaper After a Job Loss?

Published November 2, 2026 · 8 min read

Quick answer

If your household income is under 400% of the poverty level (about $62,600 for one person or $128,600 for a family of four in 2026), an ACA Marketplace plan is almost always cheaper than COBRA. COBRA averages about $833 a month for one person and gets no subsidy. COBRA makes sense mainly when you have already met this year's deductible, are in the middle of treatment, or your employer is paying part of it.

When you leave a job, you usually have two ways to stay insured: keep your employer plan through COBRA, or buy a plan on HealthCare.gov or your state's marketplace. The right choice can be worth thousands of dollars. Here is how to compare them, with real numbers.

How COBRA Works

COBRA lets you keep exactly the same health plan, doctors, and deductible progress for up to 18 months (36 months in some situations, such as divorce or the death of the covered employee). The catch is the price: you pay the whole premium, including the share your employer used to pay, plus up to a 2% administrative fee. According to KFF's 2026 Employer Health Benefits Survey, the average employer plan costs $9,804 a year for single coverage and $28,303 for family coverage. On COBRA that is roughly $833 a month single and $2,406 a month family.

How an ACA Marketplace Plan Works

Losing job-based coverage gives you a 60-day special enrollment period to buy a Marketplace plan. Its big advantage is the premium tax credit: the government caps what you pay for the benchmark Silver plan at a share of your income. In 2026 that share runs from 2.1% to 9.96% of income for households between 100% and 400% of the poverty level. Above 400% there is no subsidy, because the enhanced credits that removed that cliff expired at the end of 2025.

Side-by-Side Examples

These examples use 2026 subsidy rules, average 2026 COBRA costs, and illustrative benchmark Silver premiums of $620 a month for a 45-year-old and $1,900 a month for a family of four. Your real benchmark depends on your age and ZIP code.

Household	Poverty level	Expected payment	ACA Silver	COBRA	Difference
Single, age 45, income $40,000	256%	8.6% of income ($287/mo)	$287	$833	ACA saves $546/mo
Family of 4, income $90,000	280%	9.35% of income ($701/mo)	$701	$2,406	ACA saves $1,705/mo
Single, age 45, income $70,000	447%	No subsidy (above 400%)	$620	$833	ACA saves $213/mo

Even with no subsidy, the Marketplace plan in the third example is cheaper per month, though it may have a higher deductible or a narrower network than the old employer plan. Over six months, the first household saves about $3,276 and the family about $10,230 by choosing the Marketplace.

Run your own numbers with the COBRA vs ACA Calculator, or check your subsidy alone with the Obamacare Subsidy Calculator.

When COBRA Is the Better Choice

You have already met your deductible or out-of-pocket maximum. A new Marketplace plan starts from zero. If you have a $4,000 deductible already paid and expensive care ahead, staying on COBRA until December can cost less overall. Compare with the Out-of-Pocket Calculator.
You are mid-treatment (pregnancy, cancer care, surgery follow-up) and your doctors or hospital are not in any Marketplace network near you.
Your employer is paying part of COBRA as part of severance. Check your severance agreement.
You only need a short bridge before a new job's coverage starts, and keeping the same plan avoids disruption.

Deadlines and Rules That Trip People Up

60 days to elect COBRA, counted from the later of when coverage ends or when you get the election notice. Coverage is retroactive, so you can wait, shop the Marketplace, and elect COBRA only if something happens.
60 days for a Marketplace plan after losing job coverage. Don't let this window close while you decide.
Dropping COBRA voluntarily does not let you switch to the Marketplace mid-year. You would have to wait for open enrollment. Running out of COBRA does qualify.
No subsidy while on COBRA. Being offered COBRA doesn't affect your premium tax credit, but being enrolled in it does.
Estimate income carefully. Subsidies are based on the whole year's income, including severance and unemployment benefits. If you go over 400% of the poverty level, you repay the entire subsidy at tax time.

What About 2027?

Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027. Marketplace premiums and subsidy percentages are updated for 2027, so check your actual prices on HealthCare.gov. If you are on COBRA now, open enrollment is your chance to switch to a Marketplace plan for January without needing a special enrollment period. See Open Enrollment 2027: What to Expect and How COBRA Insurance Works.

Sources: KFF 2026 Employer Health Benefits Survey; U.S. Department of Labor, An Employee's Guide to Health Benefits Under COBRA; HealthCare.gov (special enrollment periods, COBRA and the Marketplace); IRS Revenue Procedure 2025-25 (2026 applicable percentages); HHS 2025 poverty guidelines. Benchmark premiums in the examples are illustrative. Educational information, not insurance or tax advice.