How to Pay for Health Insurance on Your Own: ACA, COBRA, and HSAs

Paying for health insurance on your own means choosing among a handful of paths: Medicaid if your income qualifies, an ACA marketplace plan (often with a premium tax credit), COBRA to keep a former employer’s plan for a while, a short-term policy as a stopgap, or a high-deductible plan paired with a health savings account. The right choice depends on your income, how much care you expect to use, and how long you need coverage.

Start With Medicaid

Before you spend money on a plan, check whether you qualify for Medicaid. In most states, adults with household income below 138% of the federal poverty level qualify at little or no cost.¹ For a single person in 2026, that’s roughly $22,025; for a family of four, about $45,540.²

Not every state has expanded Medicaid. In states that haven’t, adults without children or a disability often can’t get Medicaid no matter how little they earn, and their income may also fall below the floor for marketplace subsidies. This is called the “coverage gap.”¹ Apply through your state’s Medicaid agency or through HealthCare.gov, which checks eligibility automatically.

Buying a Plan Through the ACA Marketplace

If Medicaid isn’t available to you, the ACA marketplace is where most people start. Every marketplace plan must cover a core set of benefits including doctor visits, hospital care, prescription drugs, maternity care, mental health treatment, and preventive services, and insurers cannot deny coverage or charge more because of a pre-existing condition.³

When You Can Enroll

Open enrollment runs from November 1 through January 15. Enroll by December 15 for a January 1 start; enroll between December 16 and January 15 for a February 1 start.⁴ Some state-run marketplaces set their own deadlines.

Outside open enrollment, you need a special enrollment period. Common triggers include losing job-based coverage, getting married, having a baby, or moving. You generally have 60 days from the event; losing Medicaid or CHIP gives you 90.⁵ Miss the window and you wait until next open enrollment.

Metal Tiers and Your Share of the Cost

Marketplace plans fall into four categories based on how you and the insurer split costs:

Bronze: Lowest premiums, highest out-of-pocket costs. Covers about 60% of average expenses. Best if you rarely need care and mainly want protection against a major event.
Silver: Moderate premiums and costs, covering about 70%. Silver is the only tier that qualifies for cost-sharing reductions, which lower your deductible and copays if your income falls in a certain range.
Gold: Higher premiums, lower out-of-pocket costs (about 80%). Makes sense if you use a lot of care or take expensive medications.
Platinum: Highest premiums, lowest out-of-pocket costs (about 90%). Not available in every market.

Whatever tier you pick, all marketplace plans in 2026 cap annual out-of-pocket spending (excluding premiums) at $10,600 for individual coverage and $21,200 for family coverage. After that, the plan pays 100% of covered services.

Premium Tax Credits in 2026

Subsidies got harder to qualify for this year. From 2021 through 2025, expanded credits made marketplace coverage cheaper for millions of people and eliminated the income cap. Those enhanced credits expired January 1, 2026, and as of this writing Congress has not extended them.⁶ Two changes matter:

The 400% FPL income cap is back. If your household earns more than 400% of poverty ($63,840 for a single person, $132,000 for a family of four), you get no premium tax credit at all.²
The share of income you’re expected to pay is higher. A household at 200% of FPL now pays about 6.6% of income toward the benchmark silver plan, up from roughly 2% under the enhanced credits.⁶

Credits are still available between 100% and 400% of FPL. The credit equals the difference between the second-lowest-cost silver plan in your area and the percentage of income you’re expected to pay. Apply it to your monthly premium in advance or claim it as a lump sum at tax time. If your income changes during the year, tell the marketplace so the credit adjusts; overpayments are repaid when you file.

If you pick a Silver plan and your income falls between 100% and 250% of FPL, you may also qualify for cost-sharing reductions that cut your deductible, copays, and coinsurance. Those apply only to Silver plans, which is why Silver often beats a cheaper-looking Bronze when subsidies are on the table.

Catastrophic Plans

If you’re under 30, or if marketplace coverage is unaffordable based on your income, a catastrophic plan is a cheaper option. Premiums are very low and deductibles very high. You pay most routine care out of pocket, but the plan covers three primary care visits per year before the deductible plus free preventive services. After the deductible, coverage matches any other marketplace plan.⁷

People over 30 can qualify with a hardship or affordability exemption.⁷ Premium tax credits cannot be applied to catastrophic plans, so if you qualify for meaningful subsidies, a subsidized Bronze or Silver plan may actually cost less.

Buying Directly From an Insurer

You can also buy an ACA-compliant plan straight from an insurance company. Benefits and consumer protections are identical, but you cannot receive premium tax credits or cost-sharing reductions off-exchange. If your income is above 400% of FPL in 2026, you lose nothing by going direct, and some insurers sell off-exchange plans that don’t appear on the marketplace.

Whatever the source, the network type shapes what you’ll pay and which doctors you can see:

HMO: You pick a primary care doctor who refers you to specialists. Out-of-network care generally isn’t covered.
PPO: No referrals, and out-of-network doctors are covered at higher cost.
EPO: Like an HMO for out-of-network (usually not covered), but you may not need referrals.
POS: A hybrid. Referrals typically required, out-of-network care partially covered.

Check the provider directory before enrolling if you want to keep a specific doctor. Networks can change from year to year.

COBRA: Keeping Your Old Employer Plan

If you recently left a job with health insurance, COBRA lets you keep that exact plan for a while. Coverage, network, and benefits stay the same. The price is the problem: your employer was probably paying most of your premium, and under COBRA you take over the full amount plus a 2% administrative fee.⁸ Average employer-sponsored premiums run over $700 a month for individual coverage and above $2,000 for families, which is why most people leaving a job move to the marketplace instead.

COBRA applies to employers with 20 or more employees.⁹ If your former employer was smaller, your state may have a “mini-COBRA” law with similar rights on different terms.

After a qualifying event like job loss or reduced hours, you have 60 days from the election notice to enroll, and 45 days after electing to make the first payment. Coverage is retroactive to when your employer plan ended, so there’s no gap if you decide in time. Miss either deadline and the option is gone. Standard COBRA lasts 18 months, with longer extensions available in specific disability and dependent situations.¹⁰

COBRA makes sense when you’re mid-treatment with a specialist who isn’t in any marketplace network, or when you need a month or two of bridge coverage and don’t want to switch. For anything longer, compare the premium against a subsidized marketplace plan.

Short-Term Health Insurance

Short-term plans are gap coverage. They cost less than ACA plans because they cover far less. Pre-existing conditions are typically excluded, and most short-term plans skip preventive care, maternity, mental health treatment, and prescription drugs.¹¹ Many impose annual or lifetime benefit caps.

Duration rules are unsettled. Federal rules finalized in 2024 limited short-term plans to an initial term of three months plus a one-month extension.¹² In August 2025, federal agencies announced they would not prioritize enforcing that limit and intend to undertake new rulemaking.¹³ Some insurers may again offer longer plans at the federal level, but a number of states impose their own stricter limits or prohibit these plans outright. Check your state insurance department for current rules.

Premiums look attractive, but deductibles often start at $5,000 or higher, and coinsurance after that can be steep. Because insurers can turn you down or exclude conditions based on medical history, short-term coverage really only works if you’re generally healthy and waiting for a marketplace window or a new employer plan. It’s not a substitute for comprehensive insurance.

High-Deductible Plans Paired With an HSA

A health savings account lets you set aside pre-tax money for medical expenses, but only if you’re enrolled in a qualifying high-deductible health plan. In 2026, an HDHP must have a deductible of at least $1,700 for individual coverage or $3,400 for family coverage, and out-of-pocket costs (excluding premiums) cannot exceed $8,500 or $17,000.¹⁴

The tax treatment is the reason to consider one. Contributions reduce your taxable income, the balance grows tax-free through interest or investments, and withdrawals for qualified medical expenses are tax-free.¹⁵ Unlike a flexible spending account, HSA funds roll over indefinitely. After age 65, you can withdraw for any purpose without penalty, though non-medical withdrawals are taxed as income.

For 2026, you can contribute up to $4,400 with individual HDHP coverage or $8,750 for family coverage, with an extra $1,000 allowed at age 55 or older.¹⁶ Employer contributions count against the limit, so subtract any employer deposit from what you can add.

This approach works best if you can absorb routine medical costs out of pocket and want a long-term tax-advantaged medical fund. The high deductible means more exposure up front, but tax savings and investment growth often more than compensate over years of relatively good health.

Deducting Your Premiums at Tax Time

Paying premiums out of your own pocket can lower your tax bill, but the rules split by whether you’re self-employed.

If You’re Self-Employed

If you earn self-employment income, you can deduct the full cost of health insurance premiums for yourself, your spouse, your dependents, and your children under age 27, even if those children aren’t tax dependents.¹⁷ Medical, dental, and vision premiums all count, and for self-employed people on Medicare, so do Part B, Part D, and Medigap premiums.

You claim it on Schedule 1, which reduces your adjusted gross income directly, so you benefit even if you don’t itemize.¹⁸ Two limits apply. You can’t claim the deduction for any month you were eligible for an employer plan, including a spouse’s employer plan. And the deduction can’t exceed your net self-employment income for the year; a business loss or thin profit will cap what you can deduct, and the unused portion doesn’t carry forward.

If You’re Not Self-Employed

If you itemize, you can deduct medical expenses that exceed 7.5% of your adjusted gross income.¹⁹ Medical expenses here include premiums, copays, deductibles, and other unreimbursed costs. Only the amount above the 7.5% floor counts.

The practical catch is that the standard deduction is high enough that many people come out ahead without itemizing. This deduction typically pays off in a year with unusually large bills: a surgery, an extended hospital stay, or ongoing treatment for a serious condition. Keep receipts and premium statements in case the IRS asks.

1
HealthCare.gov. Medicaid Expansion and What It Means for You
2
HHS ASPE. 2026 Poverty Guidelines
3
HealthCare.gov. Essential Health Benefits
4
HealthCare.gov. When Can You Get Health Insurance?
5
HealthCare.gov. Getting Health Coverage Outside Open Enrollment
6
Congressional Research Service. Enhanced Premium Tax Credit and 2026 Exchange Premiums
7
HealthCare.gov. Catastrophic Health Plans
8
U.S. Department of Labor. COBRA Continuation Coverage
9
Office of the Law Revision Counsel. 29 USC 1161 – Plans Must Provide Continuation Coverage to Certain Individuals
10
Centers for Medicare & Medicaid Services. COBRA Continuation Coverage Questions and Answers
11
National Association of Insurance Commissioners. Short-Term Limited-Duration Health Plans
12
Federal Register. Short-Term, Limited-Duration Insurance and Independent Noncoordinated Excepted Benefits Coverage
13
U.S. Department of Labor. Statement on Short-Term Limited-Duration Insurance
14
Internal Revenue Service. Notice 2026-5
15
Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts
16
Internal Revenue Service. Revenue Procedure 2025-19
17
Office of the Law Revision Counsel. 26 USC 162 – Trade or Business Expenses
18
Internal Revenue Service. Instructions for Form 7206
19
Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses