COBRA and ACA marketplace plans are the two options most people face after losing employer coverage. Both give you real health insurance. They differ enormously in cost, in how you enroll, and in what happens to your deductible — and the right answer genuinely depends on your situation rather than on which one is "better".
The short version
COBRA continues your existing employer plan exactly as it was: same network, same deductible progress, same card. You pay the full premium plus a 2% administrative fee, with no employer contribution and no subsidy available.
An ACA marketplace plan is a new plan you choose. It's guaranteed-issue, covers pre-existing conditions and the ten essential health benefits, and your income may qualify you for a premium tax credit that substantially lowers the cost. Your deductible starts over.
Side by side
| COBRA | ACA marketplace | |
|---|---|---|
| Cost | Full premium + 2% fee, no subsidy | Premium may be reduced by an income-based tax credit |
| Network & doctors | Identical to your old plan | Varies by plan — must be checked |
| Deductible | Progress this year carries over | Resets to $0 |
| Enrollment window | 60 days to elect after coverage ends | 60-day Special Enrollment Period, or Open Enrollment |
| How long it lasts | Typically up to 18 months | Ongoing, renewable each year |
| Pre-existing conditions | Covered | Covered |
Choose COBRA if…
- You're in the middle of treatment with a specialist and continuity of care matters more than the premium.
- You've already paid down a large chunk of this year's deductible and switching would restart it.
- Your employer is subsidizing COBRA as part of a severance package — this is common and changes the math completely.
- Your household income is high enough that no premium tax credit applies, and your employer plan is genuinely good.
Choose a marketplace plan if…
- Your income qualifies you for a premium tax credit — this is the most common reason, and the savings are usually large.
- You're early in the plan year, so restarting the deductible costs you little.
- You need coverage for longer than COBRA's 18 months.
- Your old employer plan was expensive or a poor fit and you'd rather choose your own.
The deadline that decides it for a lot of people
You have 60 days from the date your coverage ends to enroll in a marketplace plan under a Special Enrollment Period. COBRA has its own 60-day election window. These run concurrently, which is what trips people up: spending seven weeks deciding whether COBRA is affordable can leave you with COBRA as your only remaining option.
Note too that voluntarily dropping COBRA later does not open a new Special Enrollment Period — only exhausting it does. So the comparison is best made now, at the start, rather than after a few expensive months.
How to decide in about twenty minutes
- Get your exact COBRA premium, including the 2% fee, for everyone who needs coverage.
- Estimate your household income for the coverage year, including any taxable severance.
- Price marketplace plans in your ZIP code with the credit applied — Silver especially, if you might qualify for cost-sharing reductions.
- Check your doctors against each plan's network and your prescriptions against each formulary.
- Compare total annual cost, then factor in any deductible you've already met this year.
You can run this yourself at HealthCare.gov or your state marketplace at no charge. Or call a licensed agent and we'll do it with you — also free, and it doesn't change your premium either way. What we won't do is tell you COBRA is always the wrong answer, because sometimes it isn't.
Written by Scott Dorrell
Scott Dorrell is a licensed insurance agent and the owner of Sprinter Insurance Agency LLC, which operates Health Enrollment Center. He has spent his career helping individuals, families and self-employed people compare ACA marketplace, private and short-term health plans.