The COBRA paperwork usually arrives within a week or two of your last day, and the number on it tends to be startling. That is not because COBRA is a bad deal in some abstract sense — it is because you are seeing the full price of your coverage for the first time. Your employer was quietly paying most of it.
What COBRA actually charges
COBRA lets you keep your existing employer plan after the job ends, at 102% of the full premium — the entire cost, plus a 2% administrative fee. In 2026 that commonly lands somewhere around $600 to $1,800 a month for individual coverage, depending on the plan.
Nothing about the coverage changes. Same network, same deductible, same card, same doctors. Only the invoice changes, and it changes a lot.
What the marketplace charges instead
Losing job-based coverage is a qualifying life event, which opens a 60-day Special Enrollment Period to buy an individual marketplace plan. Premium tax credits apply based on your projected income for the year — and critically, that projection is your income now, not the salary you were earning before the layoff.
That distinction is the whole ballgame. Someone whose income drops sharply mid-year often qualifies for far more assistance than they would have expected while employed. Reported comparisons put a subsidized marketplace plan at roughly 40 to 70 percent less than COBRA for most people in this situation.
The enhanced premium tax credits that had been in place since 2021 expired at the end of 2025. The original rules are back, including the subsidy cliff at 400% of the federal poverty level — above which assistance does not taper, it stops.
If your projected household income for the year still lands above roughly $60,000 single or $125,000 for a family of four, you may be looking at a full-price marketplace plan. At full price the gap against COBRA narrows sharply, and COBRA sometimes offers richer benefits for similar money.
Severance complicates this further, because it usually counts toward income for the year. A large severance payment can push someone above the threshold they assumed they had fallen below.
The case where COBRA genuinely wins
There is one scenario where COBRA is clearly the better answer, and it gets missed constantly because it has nothing to do with the monthly premium.
Deductibles and out-of-pocket maximums reset to zero when you change plans. If you are eight months into the year, have already satisfied a $4,000 deductible, and have surgery scheduled or treatment underway, moving to a new plan means starting that spend again from nothing.
In that situation paying a higher COBRA premium for the remainder of the year is frequently the cheaper outcome overall — sometimes by thousands. The premium comparison is the wrong comparison; the total-cost-for-the-rest-of-the-year comparison is the right one.
The same logic applies if you are mid-treatment with a specific care team. Continuity is worth real money when switching plans means switching oncologists.
The timing gives you more room than it looks
The 60-day window is not quite the cliff it appears to be, because of how COBRA election works.
- You have 60 days from the loss of coverage to elect COBRA.
- After electing, you have a further 45 days to make the first payment.
- COBRA applies retroactively to the day your coverage ended.
Practically, that means you are not uninsured while you decide. If nothing happens during those weeks, you can let the election lapse and take the marketplace plan. If something does happen, you can elect COBRA and have it cover the event retroactively. It is an unusual and genuinely useful piece of consumer protection.
Voluntarily dropping COBRA later is generally not a qualifying life event. Choose COBRA, change your mind in March, and you will usually be waiting for the next open enrollment rather than switching freely.
Exhausting COBRA — reaching the end of the 18 months — does qualify. Abandoning it midway generally does not. That asymmetry is why this decision deserves more than a glance at two premium figures.
How to actually decide
- Project this year’s income honestly, including severance and any payout of unused leave. It determines your subsidy, and underestimating it now carries no repayment cap.
- Check how much of your deductible you have already used. This single number flips the answer more often than any other.
- List any treatment already underway or scheduled, and confirm whether those providers are in network on the marketplace plans available to you.
- Compare total remaining cost for the year, not monthly premium. Premium plus expected out-of-pocket, through December.
Brokers are paid by the carriers rather than by you, so running both numbers costs nothing. Given that the decision is largely one-way, it is worth thirty minutes before the 60 days runs out.
General information as of September 2026. Not a quote, an offer of coverage, or a guarantee of eligibility. COBRA rules, plan availability and subsidy eligibility vary by employer and state and change annually.
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