Then the paperwork arrives, and the number on the COBRA enrollment form can feel like a second blow.
For many households, continuing the same health plan through COBRA costs more than their rent or mortgage payment.
When you worked, your employer typically covered a large share of the premium.
Under COBRA, you keep the same coverage but usually pay the full premium yourself, plus a small administrative fee of up to 2 percent.
That employer contribution doesn't disappear because the plan got worse.
It disappears because nobody is splitting the bill anymore.
According to 2024 data from KFF, the average annual premium for employer-sponsored family coverage ran about $25,572, with workers contributing roughly $6,575 and employers covering the rest.
A laid-off worker on COBRA could face something close to that full amount, or more than $2,000 a month in some cases.
Single coverage averages lower, but the jump from a payroll deduction to a full bill still catches people off guard.
There is one piece of relief worth knowing.
Under the American Rescue Plan, the federal government fully subsidized COBRA premiums for eligible workers from April 2021 through September 2021.
That subsidy expired, and Congress has not renewed it.
Anyone quoting those old numbers today is working from outdated information.
A HealthCare.gov plan often costs less, especially if your income drops after a layoff, because premium tax credits are based on estimated annual income.
Losing job-based coverage counts as a qualifying life event, so you can enroll outside the normal open enrollment window.
In states that expanded Medicaid, a sharp income drop may qualify you there instead, sometimes at no monthly cost.
If you have a spouse or partner with employer coverage, their open enrollment or a qualifying event may let you join their plan.
And if you're generally healthy with a big emergency fund, a short-term plan or a health sharing arrangement can be cheaper, though both come with real coverage gaps worth reading carefully.
You generally have 60 days from the date your job-based coverage ends to elect COBRA, and missing that window can lock you out.
The same 60-day rule applies to special enrollment on the marketplace.
Compare at least two or three options before the deadline, not after.
One practical move: ask your former employer's HR department for the COBRA premium notice in writing, then price a marketplace plan using your new estimated income.
The gap between those two numbers is often hundreds of dollars a month, and that money can cover groceries, gas, or an emergency fund while you job hunt.
COBRA makes sense for some people, particularly those mid-treatment or locked into a specific network of doctors.
But treating it as the only option is how households burn through savings they'll need later.
The right answer depends on your income, your health needs, and how long you expect the gap to last.
The uncomfortable truth is that COBRA was designed to preserve coverage, not to be affordable.
For most newly unemployed Americans, the smartest move is to treat that enrollment form as a starting point for comparison, not a final bill.
Final Thoughts
Spend an hour with a calculator before you sign anything, because the difference can reshape your budget for the entire year.