Then comes the letter offering you the same health plan at a price that looks like a mortgage payment.
COBRA — the law that lets you keep your employer's health coverage after you leave — has always been expensive.
Here's the catch most people miss: you're now paying the full premium yourself, including the portion your employer used to cover.
In 2024, the average annual premium for family coverage through an employer ran roughly $25,000, according to KFF's annual survey.
Workers typically paid about $6,500 of that.
On COBRA, you owe the whole thing — plus up to a 2% administrative fee.
Run the math on a typical family plan and you're staring at something like $2,000 a month.
And it arrives at the exact moment your income hits zero.
Most people get 60 days to decide, and if you miss the window, you're locked out until the next open enrollment or until you land a new job with benefits.
The 2021 stimulus made this briefly bearable.
Congress covered 100% of COBRA premiums for six months through September 2021, when about 2.6 million people used the subsidy, per KFF.
Today there's no federal subsidy, and only a handful of states offer their own.
So who actually benefits from this system?
Hospitals and insurers like it because it keeps paying customers on the rolls.
Employers like it because they face no cost.
The person in between absorbs the entire bill.
That's not a safety net — it's a billing arrangement dressed up as one.
The alternative most people don't know about: Healthcare.gov.
Job loss qualifies you for a special enrollment period, and depending on your income, you may qualify for subsidies that make a marketplace plan dramatically cheaper than COBRA.
For a family of four earning $60,000, subsidies can cut premiums by hundreds of dollars a month.
A bronze plan won't match your old coverage, but it also won't drain your savings while you job hunt.
Roughly 40 states plus D.C. expanded eligibility under the ACA, and a year with little income can push you under the threshold.
Don't feel obligated to elect COBRA on day one — you have 60 days to decide, and you can even retroactively activate it if something serious happens.
Compare deductibles and networks, not just monthly premiums, because a cheap plan with a $9,000 deductible can sting.
And check whether your doctors are even in the network before you commit.
In practice, it's often the most expensive option on the table, sold as the safe one.
The safe move is usually the one nobody mails you a packet about.
If you're weighing COBRA right now, don't assume it's your only door.
Spend an hour on Healthcare.gov and your state Medicaid site before you sign anything.
Final Thoughts
The difference could be several hundred dollars a month — money you'll want when the severance runs out and the next paycheck hasn't arrived.