Then the COBRA paperwork shows up, and the number on the page can feel like a second punch.
The average family premium for employer-sponsored health coverage hit roughly $26,993 in 2025, according to KFF's annual survey.
Under COBRA, you're typically on the hook for the full amount plus a 2% administrative fee.
That's about $2,300 a month for family coverage — more than many mortgages.
For single coverage, the math isn't much kinder.
The average annual premium sits near $9,325, which works out to roughly $790 a month with the admin fee baked in.
For someone who just lost a paycheck, that's a brutal squeeze.
Why COBRA costs so much comes down to how employer insurance works.
When you're employed, your company usually covers 70% to 80% of the premium.
You only see your share deducted from each paycheck.
You're suddenly paying both sides of a bill you never saw in full.
You generally have 60 days to elect COBRA, and coverage can be retroactive to your termination date.
That sounds generous until you realize a hospital visit in week three could lock you into months of full-price premiums to cover it.
A few escape hatches exist, and they're worth knowing before you panic-sign anything.
The Health Insurance Marketplace is the big one.
Losing job-based coverage counts as a qualifying life event, so you can enroll outside open enrollment.
And here's the part that changes everything: enhanced premium tax credits from the Inflation Reduction Act are still in effect through 2025.
Depending on your income, those subsidies can slash marketplace premiums dramatically — often below COBRA, sometimes to near zero for lower earners.
If you're married and your spouse has employer coverage, that's usually the cheapest route.
Same if you qualify for Medicaid in your state, which has no premiums at all for eligible enrollees.
Short-term health plans get marketed hard to laid-off workers, but read the fine print.
They can exclude pre-existing conditions, skip maternity care, and cap payouts.
They're cheap for a reason, and that reason is often you.
One more option: some employers offer severance that includes a temporary premium subsidy.
It's not always advertised, and it costs you nothing to find out.
The practical move is to run the numbers side by side within the first week of a layoff.
Compare COBRA's full premium against a marketplace plan with subsidies applied, factoring in deductibles and whether your doctors are in-network.
A licensed navigator can do this free through Healthcare.gov or a state exchange.
Don't just default to COBRA because it's familiar.
Familiar and affordable are two different things, and the gap between them can run $15,000 a year. **The bottom line:** COBRA was designed as a bridge, not a destination, and it's priced like a luxury when you can least afford one.
Treat the 60-day window as a shopping period, not a formality — the subsidy math in 2025 makes marketplace plans the better bet for most newly unemployed Americans.
Final Thoughts
Do the comparison before the first bill arrives, because retroactive regret is expensive.