COBRA vs Marketplace in 2026: Which Is Cheaper After a Job Loss?

Last reviewed July 2026 · Sources: KFF, CMS, IRS Rev. Proc. 2025-25

Losing a job means making a health insurance decision inside 60 days, usually while distracted by everything else. In 2026 the math changed: with the enhanced subsidies gone, COBRA beats the marketplace more often than it did in 2021–2025 — but for most people under the subsidy income limits, the marketplace still wins. Here's the decision, cleanly.

What each one actually costs

COBRA lets you keep your exact employer plan for up to 18 months, but you pay the full premium — the share you paid plus the share your employer quietly paid — plus a 2% admin fee. Employer family coverage now averages roughly $25,000+/year, so COBRA routinely runs $650–$750/month for singles and $1,800–$2,200/month for families.

Marketplace costs depend on your income going forward. And here's the part people miss: subsidy eligibility is based on your estimated income for the rest of the calendar year — not the salary you just lost. A high earner laid off in March with modest income thereafter may qualify for a substantial subsidy. If your annualized income lands under 400% of FPL ($62,600 single / $128,600 family of four), the benchmark plan is capped at ≤9.96% of income — see your number in the 2026 calculator.

When COBRA is worth the premium

COBRA wins when continuity beats price: you're mid-treatment or mid-pregnancy with providers you can't switch, you've already met this year's deductible (COBRA preserves it; a new plan resets to $0), you need a specific drug formulary or specialist network no marketplace plan matches, or your severance income pushes you over the subsidy cliff anyway — in which case COBRA's group rate often beats full-price individual coverage for comparable benefits.

When the marketplace wins

Almost every other case, especially if your remaining-year income qualifies for a subsidy, you're generally healthy, or 18 months of COBRA would outlast your job gap anyway. Job loss triggers a Special Enrollment Period: 60 days from losing coverage to pick any marketplace plan, no open enrollment needed. In expansion states, a low remaining-year income can also mean free Medicaid — check before paying anyone a premium.

The mistake that locks people out

You get one clean shot at this choice. Electing COBRA and then dropping it mid-stream does not create a new Special Enrollment Period. Quit COBRA voluntarily in month 5 and you may be uninsured until January. The safe sequences are: choose the marketplace within your original 60-day window, or ride COBRA until it fully expires (expiration does trigger a new SEP), or switch from COBRA to marketplace during the annual open enrollment (November 1 – January 15). Decide once, deliberately.

A clever middle path

COBRA elections are retroactive: you have 60 days to elect and another 45 to pay, and coverage backdates to day one. Some people file the election paperwork but hold payment — if nothing happens, they enroll in a marketplace plan within their SEP window; if disaster strikes in week 3, they pay the COBRA premium and are covered retroactively. It requires attention to deadlines, but it's a legitimate free look. Just don't let both windows close while deciding.