Written by Michael LaPick
Healthcare Writer
We want to help you make educated healthcare decisions. While this post may have links to lead generation forms, this won’t influence our writing. We adhere to strict editorial standards to provide the most accurate and unbiased information.
Key Takeaways
-
COBRA continuation coverage keeps your employer plan intact, but costs rise sharply.
-
Non-ACA health plans often cost less but exclude protections and essential services.
-
ACA marketplace coverage may be cheaper than both if you qualify for subsidies.
-
Your best option depends on health status, budget, and how long you need coverage.
Overiew
Losing job-based health insurance creates tough decisions. Many people compare COBRA continuation coverage with non-ACA health plans to decide which saves more. COBRA offers seamless continuation of your employer plan, but comes with steep premiums.
By contrast, non-ACA options like short-term medical insurance are more affordable but limited. And there’s a third path: ACA marketplace plans, which may include subsidies that dramatically cut costs.
What Is COBRA Continuation Coverage?
COBRA lets you keep your employer’s health plan for up to 18–36 months.
Benefits of COBRA
-
Seamless coverage: You keep your doctors, deductibles, and benefits.
-
Comprehensive protection: Covers essential benefits such as preventive services and maternity care.
-
Peace of mind: Ideal if you’re undergoing treatment or rely on ongoing prescriptions.
Drawbacks of COBRA
-
High premiums: Since employers no longer share costs, you pay the full premium plus 2%. According to the Kaiser Family Foundation, the average family premium exceeded $23,000 in 2023.
-
Temporary safety net: Coverage ends after 18 months for most.
For a detailed breakdown, explore how COBRA compares to ACA marketplace options.
Understanding Non-ACA Health Plans
Non-ACA health insurance refers to policies not required to follow the Affordable Care Act standards. Common types include short-term health insurance, fixed-indemnity coverage, and cost-sharing programs.
Advantages of Non-ACA Coverage
-
Lower monthly premiums: Typically half the cost of COBRA.
-
Fast approval: Can start coverage quickly, even outside open enrollment.
-
Bridge coverage: Good for healthy people awaiting new benefits.
Disadvantages of Non-ACA Coverage
-
Limited protections: May exclude maternity, mental health, or prescription drugs.
-
Pre-existing conditions often excluded.
-
Benefit caps: Large medical bills can exceed coverage limits.
Before deciding, review what short-term health insurance really covers and the key things to check before buying.
Cost Comparison: COBRA vs. Non-ACA Plans
| Factor | COBRA | Non-ACA Plan |
|---|---|---|
| Monthly Premiums | $600–$800 individual / $1,800+ family | $100–$400 individual / $300–$900 family |
| Deductibles & Copays | Same as employer plan | Varies, often higher |
| Pre-existing Conditions | Covered | Often excluded |
| Essential Health Benefits | Guaranteed | Not guaranteed |
| Coverage Period | 18–36 months | 1–12 months |
| Networks | Same as employer plan | Narrow or limited |
For a side-by-side look, see this comparison of COBRA vs. short-term plans.
Which Saves More?
When COBRA May Save You Money
-
You’re pregnant or in the middle of treatment.
-
You need brand-name or specialty prescriptions.
-
Resetting your deductible mid-year would cost more.
When Non-ACA Coverage May Save You Money
-
You’re young, healthy, and rarely use care.
-
You need bridge health coverage options until a new job starts.
-
You prioritize the lowest premium over comprehensive benefits.
Shoppers also weigh marketplace vs. private insurance. If you’re debating, this guide on the differences between marketplace and private plans explains both paths.
Don’t Overlook ACA Marketplace Coverage
When you lose employer coverage, you qualify for a Special Enrollment Period. Depending on income, ACA subsidies can make marketplace plans cheaper than COBRA or non-ACA alternatives—while still guaranteeing essential health benefits.
Estimate your potential savings with the ACA subsidy calculator.
If your income changes later, check affordable alternatives to ACA health plans for additional flexibility.
FAQs
Is COBRA always more expensive than non-ACA health insurance?
Usually, yes. But if you have chronic conditions or costly prescriptions, COBRA may still save money overall.
Can I switch from COBRA to the ACA marketplace later?
Yes, you can switch from COBRA to an ACA Marketplace plan during Open Enrollment or if you qualify for a Special Enrollment Period (SEP). Qualifying events include exhausting COBRA or life changes like marriage, childbirth, or a significant income change.
Do non-ACA plans qualify as minimum essential coverage?
No—they don’t meet ACA standards, which means fewer protections for preventive care and pre-existing conditions.
Bottom Line: Choosing the Right Coverage
There’s no universal answer to whether COBRA or non-ACA coverage saves more. COBRA delivers full protection but at a steep cost. Non-ACA health plans are budget-friendly but limited in scope. ACA marketplace plans often strike a middle ground, especially if you qualify for subsidies.
Consider your health needs, budget, and the length of time you need coverage. Comparing all three options helps ensure you protect both your health and your finances.
Thank you for your feedback!
