COBRA vs. Marketplace: Which Health Plan After Job Loss?
Lost your job? Here's what you need to know about health insurance right now:
The Bottom Line: Most people save more money with Marketplace plans than COBRA. Why? 94% get financial help that drops costs to under $10/month. COBRA keeps your exact same plan but costs 4x more.
Here's a quick breakdown:
| Feature | COBRA | Marketplace |
|---|---|---|
| Monthly Cost | $599 (no aid available) | Under $10 with aid |
| Keep Current Doctors? | Yes | No - new network |
| Time Limit | 18-36 months | No limit |
| Best For | People mid-treatment who must keep doctors | People who want lower costs |
You have 60 days after losing your job to pick either:
- COBRA: Keep your exact plan but pay full price ($599/month average)
- Marketplace: New plan with possible savings (most pay under $10/month)
- Both temporarily to avoid gaps
Quick Cost Example:
- At your job: You paid $250/month
- With COBRA: You'll pay $663/month
- With Marketplace: Could be $10/month with aid
The choice comes down to this: Need your exact same doctors? Pick COBRA if you can afford it. Want to save money? Marketplace plans cost way less for 94% of people.
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Health Insurance Basics After Job Loss
Your health insurance doesn't have to stop when your job does. Here's what you need to know:
What Happens to Your Insurance When You Leave
Your work health plan usually ends when the month does. After that, you've got two main options:
| Option | When It Starts | What It Costs | How Long It Lasts |
|---|---|---|---|
| COBRA | Can start from your last day | Your premium + employer's premium + 2% fee | Up to 18 months |
| Marketplace | Starts after you sign up | Depends on what you make | As long as you need |
Your Coverage Changes
When your job ends, here's what changes with your health plan:
- You'll have a short window to submit any leftover medical bills
- Stock up on prescriptions before your plan ends
- Your doctor network might change (stays the same with COBRA, might change with Marketplace)
Don't Miss These Deadlines
Here's when you need to act:
| When | What To Do |
|---|---|
| Last day of your work month | Your old insurance stops |
| Within 60 days | Pick COBRA or Marketplace |
| After 60 days | You're stuck waiting for open enrollment |
Here's the thing: Don't put this off. COBRA lets you backdate coverage, but Marketplace insurance only starts AFTER you sign up. Wait too long, and you'll have no coverage at all.
Add these dates to your calendar and budget for the new costs. Miss these windows, and you'll have to wait for the next open enrollment (November 1 - January 15), unless something else in your life qualifies you for special enrollment.
What COBRA Insurance Offers
COBRA insurance lets you keep your employer's health plan after you leave your job. But there's a catch: you'll pay a LOT more for it.
Here's what stays the same with COBRA:
- Your doctors and hospitals
- Your prescription coverage
- Your deductibles and copays
- Your dental and vision benefits (if you had them)
The only difference? You're paying the full price - both your part AND what your employer used to pay.
Who Can Get COBRA
| Who Qualifies | Coverage Length |
|---|---|
| Left job or got fired (except misconduct) | 18 months |
| Hours cut | 18 months |
| Spouse after divorce/employee death | 36 months |
| Dependent children | 36 months |
You can get COBRA if:
- Your employer has 20+ full-time workers
- You sign up within 60 days of losing coverage
- You're not on Medicare
- You don't have access to another job's health plan
COBRA Price Breakdown
Let's talk money. Here's what you'll pay each month:
| Cost Component | What You Pay |
|---|---|
| Your old premium | $400-700 (average) |
| Employer's share | Now it's on you |
| Admin fee | Extra 2% |
Want to see the REAL numbers? The Kaiser Family Foundation found that family health plans cost $22,221 per year in 2021. With COBRA, that means:
- $1,851.75 per month ($22,221 ÷ 12)
- Plus $37.04 admin fee
- Total: $1,888.79 monthly
Here's a pro tip: Check out the Marketplace before jumping into COBRA. With income-based subsidies, you might pay WAY less.
You've got 60 days to make up your mind. And yes, COBRA can start from your last work day - but you'll need to pay for all those months.
What Marketplace Insurance Offers
The Health Insurance Marketplace at Healthcare.gov matches you with health plans based on what you earn. Here's what you need to know.
Plan Types and Costs
The Marketplace uses "metal" tiers to show how costs split between you and your insurance:
| Plan Level | Insurance Pays | You Pay | What to Know |
|---|---|---|---|
| Bronze | 60% | 40% | Lower monthly bills, but you pay more for care |
| Silver | 70% | 30% | Middle-ground costs, opens door for extra savings |
| Gold | 80% | 20% | Pay more monthly, less when you see doctors |
| Platinum | 90% | 10% | Highest monthly cost, lowest fees at doctors |
Here's what people pay each month (2023 numbers):
| Your Age | Monthly Cost |
|---|---|
| 30 | $483 |
| 40 | $544 |
| 50 | $760 |
| 60 | $1,154 |
Getting Coverage After Job Loss
Lost your work insurance? Here's the deal:
- You get 60 days to sign up after losing coverage
- Job loss lets you enroll right away
- Apply anytime for Medicaid if you qualify
- Your health history won't block or delay coverage
What You'll Actually Pay
While silver plans average $456 monthly in 2023, there's more to the story:
- Most people pay $10 or less per month with financial help
- Make less than 400% of federal poverty level? You'll get tax credits
- Want cost-sharing help? Pick a silver plan
- Most you'll pay in 2023: $9,100 (just you) or $18,200 (family)
Pro tip: Check for tax credits first. Your real costs might be WAY lower than what you see listed.
COBRA vs. Marketplace: Key Differences
Here's how COBRA and Marketplace plans compare in 2023:
| Feature | COBRA | Marketplace |
|---|---|---|
| Monthly Cost | $599 average | $462 average before help |
| With Financial Help | No discounts available | As low as $48/month |
| Coverage Length | 18-36 months | Yearly, can renew |
| Provider Network | Keep your current doctors | New network options |
| Enrollment Window | 60 days after job loss | 60 days after coverage loss |
| Who Can Join | Workers from companies with 20+ employees | Anyone without work insurance |
Let's break down what REALLY matters: the cost difference.
Check out what families pay each month:
| Household Size | COBRA Monthly Cost | Marketplace Cost | Monthly Savings |
|---|---|---|---|
| Single Person | $463 | $147 | $316 |
| Two People | $971 | $154 | $817 |
| Three People | $1,388 | $240 | $1,148 |
Here's what you need to know about costs:
- 94% of people get financial help with Marketplace plans
- With COBRA, you pay your premium + your employer's share + 2% fee
- Most people pay $10 or less per month on Marketplace plans
Now, let's talk about what you get:
COBRA keeps everything EXACTLY the same - same plan, same doctors, same coverage. But you'll pay A LOT more.
Marketplace plans? They're different. You pick new coverage and doctors, but the monthly costs are WAY lower.
Which One's Right for You?
COBRA makes sense if:
- You've already hit your deductible
- You NEED to keep your current doctors
- Money isn't a big concern
Marketplace is your best bet if:
- You want to save money (like, A LOT of money)
- You're OK with switching doctors
- You qualify for financial help
Here's proof it works: A ThrivePass study found that when a tech company showed workers both options, 40% chose Marketplace plans over COBRA. They got solid coverage AND saved money.
Money Planning for Health Insurance
Here's what happens to your health insurance costs when you lose your job:
Your monthly payment jumps from covering just 17% of the cost to paying for ALL of it (plus extra fees with COBRA).
Let me break this down:
| Insurance Choice | Monthly Cost | What You Get | Watch Out For |
|---|---|---|---|
| COBRA | Full premium + 2% fee | Keep your exact plan | Same deductible continues |
| Marketplace | Can be $10/month | Brand new plan | Deductible starts over |
Here's a real example: Say you paid $250/month at your job. Your employer paid $400. With COBRA, you'll now pay $663/month ($650 + that 2% fee).
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How to Pay for Healthcare Between Jobs
First, you need to know your timeline:
- You have 60 days to pick a plan
- Coverage won't start until you pay
- COBRA lasts 18-36 months
- Marketplace plans run for one year
Your costs will look different depending on what you pick:
| Cost Type | COBRA | Marketplace |
|---|---|---|
| Monthly Payment | Pay full amount right away | First payment before start |
| Deductible | Keeps going from before | Starts at zero |
| Max You'll Pay | Same as before | New amount |
Here's what to do:
- See if you can get Medicaid
- Check Marketplace discounts
- Save up for your first payment
- Plan for extra costs like deductibles
Most people pay WAY less with Marketplace plans than COBRA. The Kaiser Family Foundation found that Marketplace customers usually pay between 0-8.5% of their income for a silver plan.
Want to save money? Do this:
- Apply for premium tax credits
- Add up ALL costs, not just monthly ones
- Think about your health needs
- Don't forget about your prescriptions
Choosing Your Plan
Here's how to pick between COBRA and Marketplace plans without getting a headache.
Current Health Needs
The biggest difference? COBRA keeps everything the same. Marketplace plans change things up.
| Health Need | COBRA | Marketplace |
|---|---|---|
| Current Doctors | Keep them | Need to check network |
| Prescriptions | Same coverage | Different coverage |
| Ongoing Treatment | No changes | Might need changes |
| Out-of-pocket Costs | Stays the same | Starts from zero |
Make a quick list of your doctors and meds. With COBRA, nothing changes. With Marketplace? You'll need to do some homework.
"If your employer helps pay for COBRA, that's your best bet." - Noor Ali, M.D., Concierge Health Insurance Adviser
Future Health Plans
Your timeline makes a BIG difference:
| When to Pick What | Why |
|---|---|
| Short job hunt (< 3 months) | Go COBRA |
| Longer job hunt (> 3 months) | Try Marketplace |
| Surgery coming up | Stick with COBRA |
| Just need basics | Look at Marketplace |
Here's the kicker: Most employers pay 82% of your insurance costs. With COBRA, that's now YOUR bill.
Before you decide:
- Ask if your company helps with COBRA
- Check Marketplace plan prices
- Add up ALL the costs
- Think about your timeline
Bottom line: Healthy and job hunting? Marketplace plans cost less. Need surgery or have ongoing care? COBRA keeps things simple (but costs more).
Want to track these costs? The Ink + Power Rich Bitch planner has a budgeting section for exactly this. Map out your COBRA or Marketplace costs right next to your other expenses.
Special Health Situations
Existing Health Conditions
COBRA and Marketplace plans BOTH cover pre-existing conditions, but they work differently:
| Plan Type | Coverage Details | Best For |
|---|---|---|
| COBRA | Keep your current doctors and meds | People in active treatment |
| Marketplace | Switch to new network | People with stable health |
Here's the deal:
Pick COBRA if you:
- Can't switch doctors right now
- Take specific meds not on basic plans
- Already hit your deductible
Go with Marketplace if you:
- Don't mind changing doctors
- Have a stable condition
- Want lower costs based on income
"Both COBRA and ACA plans cover preexisting conditions - the main difference is keeping vs. switching your care team." - Noor Ali, M.D., Health Insurance Adviser
Family Health Needs
Here's what matters for families:
| Situation | COBRA | Marketplace |
|---|---|---|
| Pregnancy | Keep your OB/GYN | Must find new doctors |
| New Baby | Up to 36 months coverage | Special enrollment opens |
| Young Adult | Parent's plan until 26 | May cost less alone |
| Spouse | Keep current doctors | Need new network |
The Money Side:
- COBRA = Your premium + 2% fee
- Family plans cost about $18,764/year
- 8 out of 10 people pay less on Marketplace
For Pregnancy:
- Companies with 15+ workers MUST cover it
- Mid-pregnancy? Stick with your plan
- Compare birth costs between options
Pro tip: Track ALL your health costs. The Ink + Power Rich Bitch planner helps you budget for regular and surprise medical expenses.
How to Sign Up
Here's what you need to know about signing up for COBRA or Marketplace insurance after losing your job.
COBRA Signup Process
The clock starts ticking as soon as you lose your job. Here's what happens:
| Step | Timeline | What You Do |
|---|---|---|
| 1. Get Notice | Within 44 days | Wait for employer's COBRA letter |
| 2. Check Details | 14 days | Look at coverage and costs |
| 3. Make Choice | 60 days from notice | Say yes or no to COBRA |
| 4. Pay Up | First payment due | Pay premium + 2% admin fee |
The bottom line with COBRA? It's expensive. You'll pay about $599 per month, and you're on the hook for ALL of it. Plus, you'll need to pay for any months between your job loss and when you sign up.
Marketplace Insurance: Faster and Cheaper
Getting Marketplace insurance is WAY simpler:
| Step | You Need | What Happens |
|---|---|---|
| 1. Price Check | Just your zip code | 5-minute quote |
| 2. Aid Check | Income details | Most people get help |
| 3. Pick Coverage | Your health needs | Choose from 4 levels |
| 4. Prove Job Loss | Documentation | For special signup |
Here's the good news: 94% of people get government help with Marketplace plans. Instead of $462/month, you might pay under $10.
Time and Money Facts:
- You've got 60 days to pick either option
- COBRA = pay for missed months
- Marketplace = starts next month, no back pay
- COBRA costs $599/month (no help available)
- Marketplace can be under $10/month with aid
Do This Now:
- Save your old insurance papers
- Send in your job loss proof ASAP
- Look at plan networks for your doctors
- Compare your options side-by-side
"94% of people qualify for government subsidies that lower the cost of ACA plans compared to COBRA." - HealthSherpa Data Report
The choice? It's yours. But most people pick Marketplace coverage because it costs WAY less and starts fresh next month.
Money Help and Tools
Cost Tracking Apps
Here are 3 apps that make tracking health costs simple:
| App Name | Cost | Key Features |
|---|---|---|
| Expensify | Free basic plan | • SmartScan for receipts under $75 |
| • IRS-guaranteed eReceipts | ||
| • Credit card import | ||
| Shoeboxed | $15/month | • Auto-extracts payment details |
| • Mobile expense reports | ||
| • Receipt organization | ||
| Quicken Classic | $35.99/year | • Medical expense categories |
| • Tax deduction tracking | ||
| • Year-end reports |
Quick Tip: Track BOTH insurance payments and out-of-pocket costs. Why? Medical expenses above 7.5% of your income could cut your tax bill.
Getting Financial Help
Want to pay less for health coverage? Here's what works:
| Program | What You Get | How to Apply |
|---|---|---|
| ACA Subsidies | Up to 90% off premiums | Healthcare.gov |
| Medicaid | Free/low-cost coverage | State Medicaid office |
| Cost-sharing | Lower deductibles | Through silver plans |
| Tax Credits | Monthly premium help | Marketplace application |
The Numbers Tell the Story:
94% of people get help with Marketplace plan costs. With aid, you might pay under $10/month. And if your income falls below 138% of the poverty level? You could get FREE Medicaid coverage.
Need Help Right Now?
- Call 1-800-318-2596 (Marketplace support)
- Go to Healthcare.gov
- Contact your state's Medicaid office
- Use Healthcare.gov's Insurance Calculator
"9 out of 10 people across the country can get financial help to lower their health plan costs." - Healthcare.gov Stats
Save Money Fast:
- Compare COBRA vs Marketplace costs
- Pick silver plans if cost-sharing applies to you
- Save receipts for tax time
- Check Medicaid if your income drops
Summary
Here's a clear look at COBRA vs Marketplace plans:
| Feature | COBRA | Marketplace |
|---|---|---|
| Monthly Cost | $599 average | $462 before aid, under $10 with aid |
| Coverage Length | 18-36 months | Ongoing with payments |
| Provider Network | Keep current doctors | May need new doctors |
| Enrollment Window | 60 days after job loss | 60 days after job loss |
| Financial Aid | None available | 94% get subsidies |
Here's what you need to know:
COBRA keeps your current plan but costs MORE. You'll pay:
- The full premium
- Plus a 2% admin fee
- NO financial help available
Marketplace plans cost LESS for most people:
- 94% of people get financial aid
- Many pay under $50/month
- Must pick new coverage
Pick COBRA if you:
- Already hit your deductible
- Must keep your doctors
- Can handle the full cost
Pick Marketplace if you:
- Want lower monthly payments
- Can switch doctors
- Need coverage beyond 36 months
"If they continue to [help pay for] the cost, then COBRA is the better option." - Noor Ali, M.D., Concierge Health Insurance Adviser
Some numbers to know:
- Employers usually pay 82% of health costs
- All Marketplace plans cover pre-existing conditions
- You have 60 days to pick either option after losing your job
Want to track your health costs? Try Expensify or Quicken. But here's the bottom line: Most people save money with Marketplace plans because of the financial aid.
FAQs
What are the disadvantages of COBRA coverage?
COBRA comes with some major downsides:
| Disadvantage | Details |
|---|---|
| High Cost | You'll pay full premium + 2% admin fee ($599/month on average) |
| Time Limits | Coverage stops after 18-36 months |
| No Control | You're stuck with any plan changes your old employer makes |
| Size Rules | Only works if your company had 20+ employees |
"For most people, particularly following job loss, the cost of COBRA continuation coverage is prohibitively expensive." - KFF
Is marketplace the same as COBRA?
Nope. These are totally different options:
| Feature | COBRA | Marketplace |
|---|---|---|
| What You Get | Your old work plan | Brand new plan |
| Doctors | Keep your current ones | New doctor network |
| Price Help | Zero assistance | 94% get money off |
| Time Limit | Ends after 18-36 months | No end date |
Is it better to use COBRA or Obamacare?
Here's what matters most:
| Pick COBRA If You: | Pick Marketplace If You: |
|---|---|
| Hit your deductible already | Want lower monthly bills |
| Need your exact same doctors | Can switch doctors |
| Can pay the full price | Need help with costs |
| Want coverage for a few months | Need long-term coverage |
Let's talk money:
- COBRA costs $599 per month (average)
- Marketplace plans: $462 before help, under $10 with help
- With COBRA, you lose the 78% your employer used to pay
- 94% of people pay less through Marketplace financial help