Then the health insurance bill shows up, and for many American families it lands like a second layoff.
COBRA lets you keep your employer's health plan after leaving a job, but you pay the full freight — the worker's share plus whatever the company used to cover.
That shift can turn a $150 payroll deduction into $700, $800, or more per month for a single person, and well past $2,000 for a family plan.
Employers typically cover 70% to 80% of premiums, according to KFF's annual employer benefits survey.
When you go on COBRA, that subsidy vanishes.
You're also often on the hook for a 2% administrative fee on top of the full premium.
A 2024 KFF analysis found average annual premiums of roughly $8,950 for single coverage and $25,572 for family coverage.
Divide those by twelve and add the admin fee, and the monthly reality gets uncomfortable fast.
The sticker shock is hitting at the worst possible moment.
Unemployment benefits replace only a fraction of lost wages in most states, and rent, groceries, and car payments don't pause while you sort out coverage.
What many people don't realize is that COBRA is rarely the only door.
The Affordable Care Act marketplaces offer subsidized plans, and losing job-based coverage counts as a qualifying life event — meaning you can enroll outside the normal open period.
For households with modest income, premium tax credits can cut the monthly cost dramatically.
Medicaid is another option in the 40-plus states that expanded eligibility under the ACA.
In those states, adults can often qualify based on income alone, and the coverage can begin quickly.
For someone with a $700 COBRA quote and a thin severance check, that gap can be the difference between insured and uninsured.
COBRA generally must be elected within 60 days of losing coverage, and you can sometimes retroactively activate it if a medical bill appears during that window.
That creates a legitimate strategy: compare marketplace and Medicaid options first, then decide whether to pay for COBRA at all.
Dental and vision are usually separate line items, and those premiums add up too.
So does the deductible, which carries over unchanged — a plan that felt affordable with an employer subsidy can feel like a trap once you're paying retail.
One more trap: COBRA coverage ends the moment you stop paying, and there's typically no grace period beyond 30 days.
Miss a payment during a chaotic job search and you can lose the plan entirely.
For anyone facing this decision, the practical move is to price all three paths — COBRA, marketplace, and Medicaid — side by side before the 60-day clock runs out.
The cheapest option isn't always the one that keeps your same doctors, but it's worth knowing the number. **The bottom line:** COBRA was designed as a bridge, not a long-term solution, and it's priced like a luxury product.
Final Thoughts
Treat it as one option among several rather than the default — and run the numbers before the deadline decides for you.