COBRA Insurance Cost Calculator

COBRA vs Your Alternatives: A Decision Framework

COBRA is almost never the cheapest option, but it is sometimes the right option depending on your healthcare situation and income. Working through the decision systematically prevents both overpaying for COBRA when alternatives are better and mistakenly going without coverage.

The Three-Question Decision Framework

First, are you eligible for Medicaid? If your projected household income for the year falls below 138% of the federal poverty level in your state, Medicaid provides comprehensive coverage at zero or near-zero premium. Check healthcare.gov immediately — this decision takes priority over COBRA.

Second, what ACA subsidy do you qualify for? Use your projected income for the full calendar year, not your prior salary. If you lost your job in July with $30,000 in YTD earnings and expect minimal income the rest of the year, your projected full-year income may be low enough for substantial subsidies. The premium tax credit can reduce Marketplace Silver plan premiums to $0–$150 per month for many households.

Third, how much healthcare do you expect to use? If you have ongoing specialist care, are pregnant, or are managing a chronic condition actively, network continuity may justify COBRA’s higher cost. If you are healthy and use healthcare minimally, a lower-premium Marketplace plan with a higher deductible may save $3,000–$6,000 in annual premiums.

2026 Marketplace Subsidy Thresholds

The 8.5% income cap extended through the ARP means even higher earners pay no more than 8.5% of income for the benchmark Silver plan — making Marketplace often cheaper than COBRA regardless of income level.

For healthcare cost planning in retirement, see our Medicare Cost Calculator.