The letter arrives about two weeks after you lose a job, and it looks official enough to matter.
It's an offer to keep your employer's health plan through COBRA, and it comes with a price tag that has nothing to do with what you used to pay.
When you're employed, your company typically covers most of the premium.
Once you're on COBRA, you pay the full amount yourself — plus a small administrative fee, usually 2 percent.
You're buying the same plan at full retail. **The math is brutal** According to KFF's 2023 employer survey, the average family premium for job-based coverage ran about $23,968 a year, with employers covering roughly $17,393 of that.
A laid-off worker on COBRA can be staring at something close to $2,000 a month for family coverage.
That's often more than a mortgage payment.
And there's no subsidy, no sliding scale, no income adjustment.
Your old salary is gone, but your old premium just got bigger.
The 2021 American Rescue Plan temporarily subsidized COBRA for people who lost jobs during the pandemic, covering the full premium for up to 18 months.
Nothing comparable has replaced it, so anyone losing coverage today pays the sticker price. **Why the sticker price is so high** Here's the uncomfortable part: COBRA didn't get expensive because of COBRA.
It got expensive because American health care did.
Hospital prices, drug costs, and administrative overhead have all climbed faster than wages for years, and employers absorbed those increases by paying more — which means the full premium has ballooned too.
COBRA just makes the hidden number visible.
Most workers have no idea what their insurance actually costs because the paycheck deduction hides it.
Losing a job rips off the cover. **Where people actually go instead** Most people don't take COBRA.
They shop the ACA marketplace, where subsidies are based on income.
If your income drops after a layoff, you may qualify for a plan that costs far less than COBRA — sometimes dramatically less.
Marketplace enrollment normally requires a special enrollment window, generally 60 days from losing coverage.
Miss it and you may be locked out until open enrollment.
COBRA has its own 60-day election window, and there's a rule worth knowing: if you elect COBRA and then drop it, you generally don't get a second shot at a special enrollment period.
Short-term plans are the other temptation.
They often exclude pre-existing conditions, skip prescription coverage, and cap what they'll pay.
A $150 monthly premium can turn into a five-figure hospital bill. **Who benefits from the confusion** Insurers collect the full premium either way.
Employers save money when you leave the payroll.
The people most exposed are the ones making a snap decision within 60 days while also job hunting, which is exactly when clear thinking is hardest.
If you're facing this, compare three things side by side: the COBRA price, a marketplace plan with an estimated subsidy, and your actual medical needs for the year.
If you're healthy and your income has dropped, the marketplace usually wins.
If you have ongoing treatment and your doctors are only in-network under your old plan, COBRA may be worth the pain — but only until you find something better. **Our take** COBRA was designed as a safety net, and for some people it still is.
But calling it affordable is a stretch when the average family premium exceeds what many households earn in two months.
The real fix isn't a better acronym — it's decoupling health coverage from employment altogether.
Final Thoughts
Until then, the smartest move is treating that letter as a starting point, not a verdict.