Then comes the letter from your former employer offering to keep your health coverage through COBRA, and the price tag can feel like a second punch.
COBRA lets you stay on your old workplace health plan for up to 18 months after leaving a job, but you pay the full premium yourself.
Now you cover it all, plus a small administrative fee of up to 2 percent.
That shift is where the shock comes from.
A 2024 survey from KFF found that the average annual premium for employer-sponsored family coverage hit roughly $25,572.
For single coverage, it was about $8,951.
Under COBRA, workers typically owe nearly the entire amount.
That works out to well over $500 a month for individual coverage and more than $2,000 a month for a family.
Groceries are still running higher than a few years ago, rent has climbed in most metro areas, and credit card interest rates remain near record highs.
Every dollar going to a COBRA premium is a dollar not going toward food, gas, or a card payment.
For many households, the math simply does not close.
The federal government's Consumer Price Index shows medical care costs keep rising faster than overall inflation in many months.
That matters because COBRA premiums are tied to the underlying plan.
When your old employer's insurer raises rates at renewal, your COBRA bill can jump too.
You are not locked into last year's price.
There is a deadline that catches people off guard.
You generally have 60 days from the date of your COBRA election notice to decide.
Miss it, and you may be locked out of that plan.
Some people assume they can sign up later once bills pile up.
A HealthCare.gov marketplace plan is often cheaper, especially with subsidies.
The American Rescue Plan and later the Inflation Reduction Act expanded those subsidies, and many families now qualify for plans with low or zero monthly premiums after tax credits.
Job loss counts as a qualifying life event, so you can enroll outside the normal open period.
Medicaid is another route in states that expanded coverage.
In non-expansion states, the income limits are much tighter, so many jobless adults fall into a coverage gap.
That is worth checking before you commit to a COBRA payment.
Short-term health plans exist, but they often exclude pre-existing conditions and skip essential benefits.
They can be cheap and still leave you exposed.
Reading the fine print matters more than the sticker price.
One more option: ask your former employer if it offers a severance package that covers part of the premium.
COBRA is a safety net, not always the best deal.
Before you write that first check, spend an hour comparing marketplace prices and subsidy eligibility.
Final Thoughts
That hour could save your household thousands over the next year.