The short version
Compare total cost over your gap, not monthly premiums. COBRA total = monthly COBRA premium × months + the care costs you still owe under your old plan. Marketplace total = (marketplace premium − your tax credit) × months + the care costs under a brand-new deductible. COBRA usually wins short bridges where you already met the deductible; the marketplace usually wins longer gaps with subsidies. Run both through the COBRA vs marketplace calculator to see the totals side by side.
Step 1: get your real COBRA number
Your COBRA election letter has the only number that matters: your monthly premium at up to 102% of the full plan cost — your old share plus your employer's share plus a 2% administration fee. Nationally that averages about $793 a month for single coverage and about $2,294 for family, but your plan is your plan. The shock most people feel ("I was paying $180!") is just seeing the employer contribution for the first time. Write down the exact number, and note how many months you would need it — COBRA runs up to 18 months after a job loss.
Step 2: price the marketplace after subsidies
Browse the marketplace for your state and note the sticker price of a comparable plan — then apply your premium tax credit. The credit is based on your income, and it is the marketplace's superpower: it applies to marketplace plans only, never to COBRA. A $600 sticker premium can become $180 after the credit. This step is where people go wrong by comparing the marketplace sticker to the COBRA premium — always compare COBRA to the after-credit marketplace number.
Step 3: model the care costs, not just the premiums
This is the step everyone skips, and it decides the comparison. Under COBRA, your deductible progress carries over — it is the same plan, so if you already met the deductible, your remaining care costs are near zero. Under a marketplace plan, you start a brand-new deductible from zero. Be honest about your care: if you are mid-treatment, pregnant, or have a planned procedure, that reset can cost you $2,000–$5,000. If you rarely see a doctor, your new-plan care costs are close to zero and the premium gap does all the talking.
Step 4: run the horizon math
Multiply each net premium by your months, add each option's care costs, and compare the totals. The pattern you will see: short bridges favor COBRA (the fresh deductible never gets paid off), and long gaps favor the marketplace (subsidies compound month after month). Try both extremes in the calculator — a 2-month gap and a 12-month gap — and you will feel where the flip happens.
Step 5: respect the traps
- The 60-day election window is a free option. You have at least 60 days to elect COBRA, and coverage is retroactive. You can wait, see if you land coverage sooner, and elect only if you need it — just never miss the deadline.
- Voluntarily dropping COBRA opens no special enrollment window. Losing your job qualifies you; choosing to end COBRA does not. Line up your next coverage before you drop it.
- COBRA keeps your doctors. If your specialists are not in any marketplace network, price the out-of-network risk into the comparison — continuity has a value the totals do not show.
- The subsidy math changes with income. A new job mid-gap changes your tax credit. Re-run the numbers when your income picture changes.
Worked example: single, 2-month bridge, deductible already met
Steps 1–2: the COBRA letter says $793 a month. The marketplace quotes $600, and the tax credit brings it to $180 net.
Step 3: the deductible was already met on the old plan, so COBRA care costs = $0. Under a new plan the full $2,500 deductible looms.
Step 4: COBRA = 793 × 2 + 0 = $1,586. Marketplace = 180 × 2 + 2,500 = $2,860. COBRA wins by $1,274 — the premium gap never recovers from the fresh deductible.
The flip: stretch the gap to 12 months and COBRA climbs to $9,516 while the marketplace totals $4,660 — the marketplace wins by $4,856. Same person, same plans, different horizon.
COBRA vs marketplace — frequently asked questions
Which is usually cheaper, COBRA or marketplace?
For people who qualify for premium tax credits, the marketplace is usually cheaper over gaps longer than a few months — the credit can cut the premium by more than half while COBRA gets no discount. COBRA usually wins for short bridges of 1–3 months, especially when you have already met your deductible. Run your own numbers with the calculator, because the deductible reset and the gap length flip the answer.
Can I use COBRA for just a month or two?
Yes — you can elect COBRA, pay for the months you need, and drop it when new coverage starts. And because the 60-day election window is retroactive, you can even wait out a short gap uninsured and elect only if something happens. Just remember: voluntarily dropping COBRA does not open a new special enrollment window.
Does COBRA cover my family too?
Yes — everyone who was on your employer plan can continue on COBRA, at the family premium (nationally about $2,294 a month on average). Each family member can also make their own choice: one person can take COBRA while the rest go to the marketplace, which sometimes produces the cheapest combined total.
What counts as a qualifying event for the marketplace?
Losing job-based coverage is the classic one, and it opens a 60-day special enrollment window before or after the loss. Moving to a new ZIP code, getting married, having a baby, or aging off a parent's plan also qualify. Without a qualifying event, you wait for open enrollment — and COBRA may be your only bridge.
Is COBRA the same as my old insurance?
Exactly the same plan, network, doctors, and deductible — only the bill changes, because you now pay the full premium your employer used to subsidize, plus up to 2% in fees. That continuity is COBRA's real product: if you are mid-treatment, keeping your exact plan is worth more than the premium math alone suggests.