When you lose a job, the first thing that hits your mailbox isn't a severance check.
It's a COBRA letter, and the number at the bottom can stop you cold.
The average family premium under COBRA now runs north of $1,900 a month, according to recent employer survey data.
That's because you're paying the full sticker price your employer used to cover, plus a small administrative fee of up to 2 percent.
Your old employer was likely covering 70 to 80 percent of that bill.
Once you're on COBRA, that subsidy vanishes overnight.
A plan that felt affordable at $300 a paycheck suddenly costs more than a car payment.
The 2025 numbers are brutal across the board.
Individual coverage averages around $700 to $750 monthly, while family plans push past $22,000 a year.
For a household already dealing with a lost income, that math rarely works.
What most people don't realize is that the Affordable Care Act marketplace is often sitting right there as a cheaper alternative.
If your income drops after a layoff, you may qualify for premium tax credits that shrink your monthly cost dramatically.
Some families land on plans for a few hundred dollars, or even less.
You generally have 60 days from your coverage loss to enroll in a marketplace plan, and that window overlaps with your COBRA election period.
Miss both, and you could be locked out until the next open enrollment.
You can sign up for marketplace coverage first, then drop it and elect COBRA later if you decide you want your old doctors back.
COBRA gives you 60 days to decide, and if you enroll retroactively, you only pay premiums back to the coverage date.
Short-term health plans get marketed hard during layoffs, but read the fine print.
They often exclude pre-existing conditions, skip prescription coverage, and cap what they'll pay.
If you're 65 or older, Medicare may already be your answer.
If you're under 26, a parent's plan could still cover you.
And if you were laid off in certain industries or through no fault of your own, check whether your state runs a special subsidy program.
One more thing worth knowing: medical bills from a coverage gap can follow you for years.
A single emergency room visit without insurance can run into five figures.
That's why the decision deserves more than a glance at the letter.
If the COBRA number feels impossible, don't just ignore it.
Call your state's insurance marketplace, price out a few plans, and compare the total cost, not just the premium.
Deductibles and networks matter as much as the monthly figure.
Our take: COBRA was designed as a safety net, not a budget plan, and treating it like one can drain your savings fast.
Final Thoughts
Shop the marketplace before you sign anything, because the cheapest option is rarely the one that arrives in the mail first.