Millions of Americans who lose a job each year get handed the same intimidating envelope: a COBRA election notice.
It promises to keep your exact health plan running, same doctors, same network, same coverage.
What the fine print doesn't shout is the price.
Under COBRA, you pay the full premium yourself, plus a 2% administrative fee.
That's the portion your employer used to quietly cover.
In 2024, the average annual premium for employer-sponsored family coverage ran about $25,572, according to KFF's Employer Health Benefits Survey.
Workers typically chipped in around $6,575 of that.
Lose the job, and that gap becomes your problem.
Do the math and the sticker shock lands hard.
A family that was paying roughly $550 a month could suddenly face $2,100 or more.
For a single person, a plan that cost $120 per paycheck can balloon past $700 a month.
It's your old plan at full retail, and you're now the buyer.
Here's the part that trips people up: you usually have 60 days to elect coverage, and it can be retroactive to the day your job ended.
Skip a costly month if you're healthy, then sign up later if something goes wrong, as long as you're still inside the window.
Miss the deadline entirely and you're locked out until the next open enrollment or a qualifying life event.
The alternative most people never hear about is the ACA marketplace.
Thanks to enhanced subsidies, many households qualify for tax credits that cap what they pay based on income.
A family of four earning $70,000 might find a marketplace silver plan far cheaper than COBRA, even after deductibles.
The catch is networks and deductibles can differ, so the plan that looks cheaper monthly may cost more when you actually use it.
Offering it costs them little and checks a legal box.
Nobody in that chain is rooting for you to compare prices.
If your employer had 20 or more workers, COBRA applies.
Smaller companies fall under state "mini-COBRA" rules with varying lengths.
If you're Medicare-eligible, COBRA and Medicare interact in ways that can create gaps, so talk to a benefits counselor before deciding.
And if you were laid off, check whether your severance includes a premium subsidy.
The practical move: don't auto-pay the first COBRA bill.
Get your income estimate together, price a marketplace plan the same week, and compare total yearly costs, not just the monthly number.
Check whether your doctors are in each network.
The uncomfortable truth is that health insurance in America is priced to punish people at their most vulnerable moment, right after a job loss.
COBRA is less a safety net than a bridge you pay full price to cross.
Final Thoughts
Treat it as one option among several, not the default, because the default is usually the most expensive one.