Quick answer: For early retirees under 65, COBRA averages roughly $790/month for one person on a typical employer plan (based on KFF data) and usually lasts 18 months. ACA marketplace plans have no time limit and can’t deny you for health conditions, but you pay full price if your income is above the subsidy threshold. Private, medically underwritten plans can cost less than unsubsidized ACA plans for healthy retirees, are available year-round, and have no enrollment deadline — but you have to qualify based on health.
If you’re retired before 65 and trying to figure out health insurance, you’ve probably been told you have two choices: stay on COBRA or go to the ACA marketplace. In 2026, both of those options are more expensive than they’ve been in years — and there’s a third option most people never hear about.
Here’s an honest comparison of all three, including who each one actually works for.
Option 1: COBRA
COBRA lets you keep your exact employer plan after you leave work. Same network, same doctors, same prescription coverage. That familiarity is genuinely valuable, particularly if you have ongoing health needs or prefer not to disrupt your care.
The catch: you now pay the entire premium yourself — both the employee and employer portions — plus a 2% administrative fee. Using KFF’s 2025 Employer Health Benefits Survey, the average employer plan costs $9,325 a year for single coverage and $26,993 for family coverage. At 102%, that works out to roughly $790 a month for one person and $2,290 a month for family coverage on an average plan. Richer plans cost more.
COBRA also has a hard 18-month limit. If you retire at 62, it’s gone by 63 and a half.
COBRA works best for: people with complex ongoing health conditions who need to keep current providers, or those with a short gap before Medicare (12–18 months) who value continuity over cost.
Option 2: ACA Marketplace
The ACA marketplace offers comprehensive coverage and cannot deny you based on health status or pre-existing conditions. If your income falls below approximately $62,600 (single) in 2026, subsidies can make marketplace plans genuinely affordable.
If your income is above that threshold, you pay full unsubsidized rates. Full-price premiums are steepest for people in their 60s, because ACA rules let insurers charge up to 3 times more for older adults than younger ones. Your exact price depends on your age, county, and plan. For many people in their early 60s, that is more than COBRA.
The enhanced subsidies that expanded ACA affordability since 2021 expired at the end of 2025, making 2026 a notably more expensive year on the marketplace for anyone near or above the subsidy threshold.
ACA marketplace works best for: retirees whose income qualifies for subsidies, or those with pre-existing conditions who need guaranteed coverage regardless of health status.
Option 3: Private Health Plans
Outside the ACA marketplace, private health insurance plans are available year-round with no open enrollment window. These plans are medically underwritten — meaning healthy applicants get lower premiums based on their actual health profile rather than a shared community pool.
For healthy early retirees above the ACA subsidy threshold, private plans can cost less than unsubsidized marketplace plans. They’re offered through major carriers and often include nationwide PPO networks. There’s no enrollment deadline — you can start a private plan any month, including the month your COBRA expires.
Private plans work best for: healthy early retirees above the ACA subsidy threshold who are paying full price on COBRA or the marketplace and want to reduce their monthly cost.
Side-by-Side Comparison
| COBRA | ACA Marketplace (no subsidy) | Private Plan | |
|---|---|---|---|
| Cost | ~$790/mo single on an average plan (KFF) | Full price above the cliff; highest for ages 60–64 | Often less than unsubsidized ACA for healthy applicants |
| Duration | 18 months max | Annual | Ongoing |
| Health requirement | None | None | Medically underwritten |
| Enrollment | 60 days after job loss | Open enrollment or SEP only | Year-round, any time |
Which One Should You Choose?
The honest answer is: it depends on your health, your income, and how many years you have until Medicare.
If you have ongoing health conditions — choose ACA marketplace. Coverage cannot be denied and premiums cannot be increased based on your health.
If you’re in good health and above the subsidy threshold — compare private plans first. The savings are often significant.
If your COBRA is expiring and Medicare is still years away — don’t default to the marketplace without comparing private plan options first.
An independent broker can show you all three options side by side, including real quotes for private plans that aren’t listed on healthcare.gov. The comparison is free and takes about five minutes.
The Bottom Line
Most early retirees overpay for health coverage because they assume COBRA and the ACA marketplace are their only options. They’re not. A private plan comparison is worth the five minutes — especially if you’re paying full price for COBRA or the marketplace and wondering if you’re getting the best value you can before Medicare.
Frequently Asked Questions
Is COBRA or ACA marketplace cheaper for early retirees? It depends on income. COBRA averages roughly $790/month for one person on a typical employer plan, with no income-based discount. ACA marketplace plans can be cheaper if your income qualifies for subsidies, but often cost more than COBRA if you’re above the subsidy threshold.
How long does COBRA coverage last after retirement? COBRA coverage lasts a maximum of 18 months from your qualifying event (retirement or job loss), though certain circumstances like disability can extend it further.
Can I get a private health plan if I have a pre-existing condition? Private, medically underwritten plans evaluate your health history, so pre-existing conditions can affect eligibility or pricing. The ACA marketplace, by contrast, cannot deny coverage or charge more based on health status.
When can I enroll in a private health plan? Private plans are available year-round with no open enrollment window or Special Enrollment Period requirement — you can apply any month, including the month your COBRA coverage ends.
What happens to ACA subsidies in 2026? The enhanced premium tax credits that expanded ACA affordability since 2021 expired at the end of 2025. In 2026, subsidy eligibility reverts to the original ACA cap of roughly 400% of the federal poverty level (about $62,600 for a single person), so many retirees who received subsidies before will now pay full price.
Not sure which option fits your situation?
I compare COBRA, ACA marketplace, and private plan quotes side by side for early retirees across Arizona — free, no obligation, takes about five minutes.
📞 480-375-1652 | 📧 derek@greenleehealthinsurance.com 🗓️ Book a free consultation | 🌐 www.greenleehealthinsurance.com
Sources
- KFF — 2025 Employer Health Benefits Survey
- HealthCare.gov — How insurance companies set health premiums
- U.S. Department of Labor — FAQs on COBRA Continuation Health Coverage for Workers
- HealthCare.gov — Getting Health Coverage Outside Open Enrollment
- HealthCare.gov — Special Enrollment Periods for Complex Health Care Issues
- KFF — A Steep Subsidy Cliff Looms for Older Middle-Income Enrollees
- healthinsurance.org — What is private health insurance?
- healthinsurance.org — What is medical underwriting?