Leaving a job to go self-employed is one of the most exciting things you can do. It's also the moment most people realize they have no idea how health insurance actually works outside of an employer plan.

The two options that come up immediately — COBRA and the ACA Marketplace — both tend to carry one reaction: sticker shock. And because those are the easiest options to find, a lot of people either overpay for coverage they don't need, or go uninsured entirely while they "figure it out."

Here's what most people don't know: there's a third option — private health insurance — that isn't on healthcare.gov, doesn't get advertised widely, and is often significantly cheaper than both COBRA and Marketplace plans for self-employed individuals who earn a solid income.

Why COBRA Is Almost Never the Right Move

COBRA lets you keep your employer's health plan after you leave a job. It sounds appealing because it's familiar — same doctors, same network, no disruption. The problem is the cost.

When you were employed, your employer was likely covering 50–80% of your premium. With COBRA, you pay 100% of that premium yourself — plus a 2% administrative fee. For individuals, that often means $400–$600 per month for coverage that felt "free" when your employer was subsidizing it. For families, COBRA premiums above $1,500–$2,000 per month are not uncommon.

COBRA is occasionally the right call — if you have a specific specialist mid-treatment, or you're in a short gap expecting new employer coverage soon. But as a long-term solution for the newly self-employed, it's almost always the most expensive option on the table.

The ACA Marketplace — Good If the Subsidies Work for You

The ACA Marketplace (healthcare.gov) offers plans with income-based tax credits that can dramatically reduce your monthly premium. If your income is moderate — roughly under $50,000 for an individual — subsidies can make ACA plans genuinely affordable, sometimes as low as $0/month for a Silver plan.

The challenge for self-employed individuals is that income can be harder to predict and often sits above the subsidy thresholds. When you're running a successful freelance business or 1099 contracting career, you may earn too much for meaningful subsidy help — which pushes Marketplace premiums into the same expensive range as COBRA.

ACA plans also have a quirk that catches people off guard: they can only be purchased during Open Enrollment (November 1 – January 15) or within 60 days of a qualifying life event. Leaving a job counts as a qualifying event — so if you time it right, you have a window. But miss that window and ACA isn't available to you until the next Open Enrollment period.

"Most of my clients who just went self-employed end up on private plans — not because ACA is bad, but because their income puts them above the subsidy range and private plans give them better value for what they actually need."

The Option Most People Don't Know About: Private Health Insurance

Private health insurance is purchased directly from insurance carriers, completely outside the government Marketplace. It doesn't involve healthcare.gov, isn't tied to Open Enrollment windows, and often offers lower premiums for healthy individuals who earn too much to benefit from ACA subsidies.

Here's what makes private plans compelling for the self-employed:

  • Speed — approval can happen within 24–48 hours. If you left your job on a Friday, you can have new coverage by Monday.
  • Cost — for a healthy individual in their 30s or 40s, solid private coverage can run $200–$400/month. Compared to COBRA at $500+, the savings add up fast.
  • Flexibility — you can apply any time of year, not just during Open Enrollment.
  • No income restrictions — unlike ACA subsidies, private plans don't penalize you for earning more.

The tradeoff is that private plans use medical underwriting — meaning your health history matters. Pre-existing conditions may affect your premiums or coverage. This is why comparing both ACA and private options side by side, for your specific situation, is so important before committing to either.

What You Should Actually Do Right Now

If you've recently gone self-employed and haven't sorted out health insurance yet, here's the honest sequence:

  1. Don't default to COBRA. You likely have better and cheaper options. COBRA should be a last resort, not a first call.
  2. Check your ACA subsidy eligibility. If your projected self-employment income for the year puts you under the subsidy threshold, ACA may genuinely be your best bet.
  3. Get a private plan quote. Even if you think you'll end up on ACA, knowing what a private plan costs for your age and health profile gives you a real comparison.
  4. Consider your doctors. If keeping specific providers matters to you, check network coverage before choosing any plan.
  5. Don't go uninsured. One emergency room visit or unexpected diagnosis without coverage can cost more than years of premiums. The risk isn't worth it.

The Bottom Line

Going self-employed doesn't mean you're stuck with expensive or confusing health insurance. It means you now have more options than you did as an employee — and the right one depends entirely on your income, health, and what you actually need from a plan.

The best thing you can do is talk to an independent broker who can look at all three options — COBRA, ACA, and private — in one conversation, without steering you toward any particular carrier. That's exactly what Rohr Health Advisors does, and there's no cost to you for that conversation.

Book a free 20-minute call and walk away knowing exactly where you stand.