Then the health insurance bill arrives, and for many Americans it lands like a second layoff.
COBRA, the federal law that lets you keep your employer's plan after leaving a job, often carries a price tag that shocks people who never saw the full premium before.
While employed, your company quietly covered most of the cost.
Once you're on COBRA, you pay both halves, plus a small administrative fee.
The result is a monthly bill that can rival a car payment.
The Numbers Behind the Sticker Shock KFF's annual employer survey puts average premiums at roughly $8,950 a year for single coverage and about $25,600 for family coverage in recent years.
Workers typically chip in only a slice of that.
On COBRA, you're on the hook for nearly the whole thing.
Do the math and a family plan can run well over $2,000 a month.
Add dental, vision, or a spouse and kids, and the total climbs fast.
For someone living on severance or unemployment, that's often more than rent.
Many people drop coverage entirely, which is exactly the risk COBRA was designed to prevent.
Why the Bills Keep Climbing Health care costs don't sit still.
Hospital prices, prescription drugs, and administrative overhead all push premiums higher each year, and those increases flow straight to anyone paying the full freight.
Insurers are also pricing in the reality that people who choose COBRA tend to have higher medical needs, which nudges rates up further.
COBRA eligibility often overlaps with a tough job market, so the moment you most need affordable coverage is the moment you can least afford the full premium.
A 2021 policy change under the American Rescue Plan temporarily subsidized 100% of COBRA costs for eligible workers, but that relief has expired.
Today, most people face the full bill again.
Where to Look Before You Pay COBRA isn't your only option, and it's frequently not the cheapest.
If you lose job-based coverage, you usually qualify for a special enrollment period on HealthCare.gov or your state exchange.
Subsidies there are based on income, and a lower income year can mean dramatically cheaper premiums.
Medicaid is another route in many states if your income drops far enough.
For younger workers, a parent's plan may be an option until age 26.
Some people find a marketplace bronze plan costs hundreds less per month than COBRA, even with a higher deductible.
You generally have 60 days to elect COBRA, and the marketplace window is similarly tight.
Miss it and you may be locked out until the next open enrollment.
What to Do This Week If a layoff is looming or just happened, treat the coverage decision like a bill you have to negotiate, not a box you automatically check.
Compare your COBRA quote against a marketplace plan side by side, factoring in premiums, deductibles, and whether your doctors are in network.
Call your state's insurance department or a navigator for free help.
Check whether you qualify for subsidies before assuming you earn too much.
And if you're healthy with low expected costs, a leaner marketplace plan may beat COBRA even after factoring in a higher deductible.
Our take: COBRA is a safety net, not a bargain, and treating it as the default choice is how families burn through savings they'll need later.
Run the numbers first, because in most cases the marketplace wins on price.
Final Thoughts
The one thing you can't do is wait, since these deadlines don't offer second chances.