Then the COBRA paperwork arrives, and the number at the bottom can feel like a second punch.
For a family of four, continuing your old employer's health plan often runs $1,800 to $2,500 a month in 2025 — because you now pay both the worker's share and the portion your employer used to cover.
Employers typically foot 70% to 80% of premiums.
You're quoted the full "gross" rate, plus a 2% administrative fee the plan is allowed to charge.
Your $250 payroll deduction can quietly become $1,000 or more.
COBRA — the Consolidated Omnibus Budget Reconciliation Act — is a 1986 law that lets you keep your workplace coverage for 18 to 36 months after a job loss, divorce, or reduction in hours.
It's also, for many households, simply unaffordable.
A 2024 KFF analysis found average annual premiums hit about $8,950 for single coverage and $25,600 for family coverage.
COBRA asks you to cover nearly all of that yourself.
You usually have 60 days to elect COBRA, and coverage is retroactive to your termination date.
If you sign up on day 55 after a hospital visit, you still owe the back premiums for those weeks.
Miss the window entirely and you may have no path back to that plan.
Insurers and employers preserve a stable risk pool, and hospitals get a payer with relatively strong reimbursement.
Meanwhile, the newly unemployed — often the people least able to absorb a four-figure monthly bill — are left doing brutal math.
The alternatives aren't always better, but they're worth pricing before you panic-pay.
ACA marketplace plans come with income-based subsidies that can slash premiums dramatically for a mid-year job loss.
Medicaid may be an option in expansion states.
A spouse's plan might allow a special enrollment.
Short-term health plans look cheap but can exclude pre-existing conditions and cap benefits — read the fine print hard.
Two practical moves: ask HR exactly what your COBRA rate will be before your last day, ideally in writing.
Then get a marketplace quote the same week so you're comparing real numbers, not guesses.
If you have ongoing treatment or doctors you can't leave, COBRA's broad network may justify the premium.
If you're generally healthy and flexible, a subsidized marketplace plan often wins on cost.
One more trap: some people assume COBRA is their only legal option and drain savings to keep it.
The deeper problem is that tying health coverage to employment means a layoff becomes a medical and financial crisis at once.
COBRA was designed to bridge a gap, not to be affordable — and it shows.
Final Thoughts
Until that changes, the smartest thing you can do is treat that letter as a starting point for comparison shopping, not a bill you're forced to accept.