Then the COBRA letter arrives, and the real number hits.
For many Americans, continuing their old workplace health plan costs more per month than their rent or car payment — and most people have no idea until they open the envelope.
COBRA lets you keep your former employer's health coverage for up to 18 months in most cases.
The catch: you pay the full premium yourself, both the part your boss used to cover and your own share, plus a small administrative fee.
That flips a plan that felt cheap at $150 a paycheck into a bill of $700 to $800 a month for single coverage.
According to KFF's 2024 Employer Health Benefits Survey, the average annual premium for family coverage ran about $25,572, with workers typically contributing around $6,575 and employers covering the rest.
On COBRA, you're on the hook for roughly the whole thing — often north of $2,100 a month.
The math is brutal for anyone living on severance or unemployment.
A single month of family COBRA can eat an entire unemployment check, and the 18-month clock keeps ticking whether you can afford it or not.
Here's what many people miss: you usually have 60 days from the date your coverage ends to elect COBRA, and you can even retroactively sign up.
If you skip it and then get hit with a surprise hospital bill, you can't go back and enroll.
If you sign up and pay, coverage applies back to day one.
But COBRA isn't always the smartest move.
If your income just dropped, a marketplace plan through Healthcare.gov often comes with subsidies that shrink premiums dramatically — sometimes to zero or near it.
The trade-off is narrower networks and higher deductibles.
For someone mid-treatment with a trusted doctor, staying on COBRA may still win.
Short-term health plans look cheap online but often skip prescription coverage, maternity care, and pre-existing conditions.
A few practical moves before you decide: check whether your spouse can add you to their plan during a special enrollment window, price marketplace options side by side with COBRA, and ask your HR department for the exact monthly figure in writing.
Some employers also offer a severance subsidy that covers part of COBRA for a few months — always ask.
If you're healthy and between jobs, a high-deductible marketplace plan paired with an HSA can cost far less than COBRA while still covering catastrophes.
If you're managing a chronic condition, run the numbers carefully — the cheapest premium isn't always the cheapest care.
Whatever you choose, don't let the letter sit unopened.
Deadlines are real, and the penalties for guessing wrong show up as medical debt. **Our take:** COBRA was designed as a safety net, but for too many families it's priced like a luxury.
Final Thoughts
Compare every option, ask about subsidies, and treat that 60-day window like the deadline it is — because the most expensive mistake is doing nothing.