COBRA vs Marketplace Cost Calculator

About the COBRA vs Marketplace Cost Calculator

When you lose employer-sponsored health insurance, you typically have two main options: COBRA continuation coverage (keeping your current plan at full cost + 2% admin fee) or purchasing a plan through the ACA marketplace (potentially with premium tax credits).

COBRA lets you keep your exact plan and providers, but you pay the entire premium — including the portion your employer used to cover. This is often a shocking 3–5x increase. A marketplace plan may cost significantly less, especially with premium tax credits, but requires switching plans and possibly providers.

This calculator compares the total cost of COBRA versus marketplace coverage for your situation. These are educational estimates only. Losing your job triggers a Special Enrollment Period for marketplace plans.

When This Page Helps

COBRA sticker shock leads many people to go uninsured. But ACA marketplace plans with subsidies are often 50–80% cheaper. This calculator reveals the actual cost difference to help you make an informed choice rather than default to expensive COBRA or no coverage.

How to Use the Inputs

1. Enter your COBRA monthly premium (should appear in your COBRA election notice).
2. Enter the marketplace plan monthly premium before subsidy.
3. Enter your estimated monthly tax credit (from Healthcare.gov or the ACA calculator).
4. Enter the number of months you'll need coverage.
5. Compare total costs and consider factors beyond price.

Example Calculation

Tips & Best Practices

• You have 60 days to elect COBRA and it's retroactive — use this window to compare marketplace options first.
• Job loss triggers a Special Enrollment Period for marketplace — you don't have to wait for open enrollment.
• COBRA lasts up to 18 months (36 for certain events) — make sure your comparison covers the full period.
• If you have expensive ongoing treatment, COBRA may be worth the extra cost to keep your current doctors.
• These are educational estimates only. Check Healthcare.gov for actual marketplace pricing.
• State-level marketplace plans (Covered California, etc.) may offer different options than Healthcare.gov.

The 60-Day COBRA Decision Window

You have 60 days from your COBRA election notice to decide, and coverage is retroactive to your termination date. This means you can wait, compare marketplace options, and only elect COBRA if needed (e.g., if you incur medical expenses during the window). This is a common cost-saving strategy.

Income-Based Decision Framework

If your post-job income will be low (unemployment only), marketplace subsidies can make plans nearly free. If you have severance that keeps income high, subsidies may be smaller. Model both scenarios: immediate marketplace enrollment vs. COBRA bridge until income drops.

Coverage Gap Risk

Going uninsured to save money is risky. A single ER visit or accident can cost $10,000–$100,000+. Short-term health plans ($100–200/month) offer limited protection but have major exclusions. Marketplace or COBRA are always safer choices than going uninsured.

Frequently Asked Questions

• Why is COBRA so expensive?

  When employed, your employer typically pays 70–83% of your health insurance premium. Under COBRA, you pay the full premium (both your share and the employer's share) plus a 2% administrative fee. A plan that cost you $300/month could cost $1,500–$2,000 with COBRA.

• Can I get ACA subsidies after job loss?

  Yes! Losing job-based coverage qualifies you for a Special Enrollment Period on the marketplace. Your ACA subsidy is based on projected income for the current year, so if you're earning less due to unemployment, you may qualify for significant tax credits.

• Can I use unemployment income for ACA subsidies?

  Yes, unemployment benefits count as income for ACA subsidy calculations. If unemployment benefits are your primary income, your total MAGI may be low enough to qualify for Medicaid (in expansion states) or large marketplace subsidies. Project your full-year income carefully.

• Should I maintain COBRA for continuity of care?

  If you're in the middle of treatment, have upcoming surgery, or need specific specialists, COBRA preserves your provider network. For a short bridge (1–2 months), the convenience may justify the cost. For longer periods, the cost difference usually favors marketplace plans.

• Can I start COBRA and switch to marketplace later?

  You can switch from COBRA to a marketplace plan during the annual Open Enrollment Period (Nov 1 – Jan 15). However, simply having COBRA doesn't trigger a Special Enrollment Period for the marketplace. Strategy: use COBRA for a month of continuity, then switch if open enrollment aligns.

• What is mini-COBRA for small employers?

  Federal COBRA applies to employers with 20+ employees. Many states have "mini-COBRA" laws that extend similar rights to employees of smaller companies. Duration and terms vary by state. Check your state's insurance department for small-employer continuation rights.