First, work out which set of rules applies to you
This is the fork that determines everything else, and getting it wrong is the expensive version of this situation.
Under 65: your routes are COBRA, the ACA marketplace at HealthCare.gov, ARHOME Medicaid, or a spouse's plan. Your main deadline is 60 days.
65 or over: your route is Medicare. Not the marketplace. A marketplace plan does not protect you from the Part B late enrollment penalty, and once you are eligible for premium-free Part A your marketplace subsidies generally end, so you would be paying full price while a permanent Medicare surcharge accrues underneath. Skip to the retirement section below.
Under 65: the four routes
A spouse's plan
Check this first because it is frequently the cheapest answer and people forget it is available. Your loss of coverage opens a special enrollment window on your spouse's employer plan, usually 30 days rather than 60, so it is also the shortest deadline on this page. Ask their HR department in the first week.
COBRA
COBRA continues the exact plan you had: same network, same formulary, same deductible progress. You have 60 days to elect and, once elected, coverage is retroactive to the day the old plan ended, which means no gap even if you take five weeks to decide.
What it costs is the entire premium, your old share plus your employer's share, plus an administrative fee. That is usually several times the payroll deduction you were used to, and the size of it is the standard shock. Nothing about the coverage got worse. You are simply seeing the real price for the first time.
COBRA is the right answer in two situations, and they are both about timing rather than price. If you are mid-treatment with a specialist you cannot interrupt, keeping the identical network is worth real money. And if you have already met most of your deductible and out-of-pocket maximum this year, starting over on a new plan in September can cost more than the COBRA premium for the remaining months.
A marketplace plan
This is where most people under 65 land, and the reason is income. Marketplace premium tax credits are based on your expected income for the calendar year, and your income after a job ends is often far below what made you ineligible while working.
Apply before the coverage ends, not after. The Special Enrollment Period for losing coverage starts 60 days before the loss. Apply in advance and the new plan can begin the day after the old one stops. Apply afterwards and coverage usually starts the first of the following month, which leaves you genuinely uninsured in between.
One thing to be careful about. The enhanced premium tax credits that reached above 400% of the federal poverty level expired at the end of 2025, so the cliff at 400% is a hard edge again. If your severance, your final paycheck, and any bonus push your annual income above that line, the credit is zero rather than reduced. Work out the whole-year number before you estimate income on the application, because getting it wrong means paying it back at tax time.
ARHOME Medicaid
Arkansas expanded Medicaid, and ARHOME covers adults up to 138% of the federal poverty level. It enrolls year-round with no window to miss, and the HealthCare.gov application screens for it automatically, so you do not need to apply separately.
The trap is the same one as above in reverse. Eligibility is assessed on current monthly income for Medicaid but on projected annual income for marketplace subsidies, and a strong first half of the year can leave you above the Medicaid line while your actual bank balance says otherwise. If you are in that position, say so on the application rather than guessing, and expect to provide documentation.
How to actually choose
Two questions settle it most of the time.
How much have you already spent on healthcare this year? If you are most of the way through a deductible and out-of-pocket maximum, COBRA is usually worth the premium for the remaining months of the year, then move to a marketplace plan on January 1 when everything resets anyway. If it is February and you have spent nothing, that argument disappears entirely.
What will your income be for the whole calendar year? Not this month. The full year, including what you already earned and any severance. That number determines your premium tax credit, and it is frequently the difference between a marketplace plan costing less than COBRA and costing about the same.
The order matters more than the answer. Run both numbers in the first week or two, while the COBRA election window is still open and you can still choose either. People who default to COBRA and start comparing in month four have usually lost the marketplace window and are stuck with the expensive option until January.
Retiring at or after 65
Different rules, and this is where the costly mistake lives.
Losing coverage through current employment gives you an eight-month Special Enrollment Period for Part B with no penalty. It starts when the employment or the coverage ends, whichever comes first. It does not start when COBRA ends, and this trips up a lot of people, because eighteen months of COBRA outlasts the eight-month window by ten months. By the time COBRA runs out, the penalty has already begun accruing and it is permanent.
Enroll in Part B when the job ends. You can keep COBRA running alongside Medicare if you want the network, but Part B needs to start on time.
Watch the second clock too. The Part B window is eight months. The window to pick up a Part D drug plan or a Medicare Advantage plan is two months. Someone who takes their time on the generous window quietly misses the tight one and starts accruing a drug penalty instead. Handle everything inside two months.
One piece of good news specific to this situation: involuntarily losing employer coverage is a guaranteed issue event for Medicare Supplement. You have 63 days to buy a policy with no medical underwriting. In Arkansas, which has no birthday rule and no annual guaranteed issue window, that is a genuinely rare opening, and if a Supplement is what you want, this is the cheapest moment you will ever get it.
The paperwork to ask for on your way out
- A letter from HR or the insurer stating the exact date coverage ends. Both the marketplace and Medicare will ask for it, and it is far easier to get on your last day than three months later.
- If you are 65 or over, form CMS-L564 completed by the employer, confirming your group coverage dates. Request it immediately. It depends on an HR department moving at their pace.
- Your COBRA election notice, which also serves as proof of coverage loss for a marketplace application.
- A creditable coverage letter for prescription drug coverage, which protects you from the Part D penalty.
Lancaster Cook holds both FFM certification for the marketplace and AHIP certification for Medicare, Arkansas license #8021079, which means the under-65 and over-65 versions of this question can be answered in the same conversation. There is no cost, and the premium is identical whether you enroll through an agent or on your own.