When you lose a job, the last thing you want is a gap in coverage.
But the price tag attached to keeping your old workplace plan through COBRA is catching a lot of Americans off guard this year.
COBRA, the federal law that lets you stay on your former employer's health plan for up to 18 months, has always been pricey.
The catch is that most workers only pay a slice of their premium while employed.
Once you're on COBRA, you cover the whole thing yourself.
Say your employer was paying $500 a month toward your family plan.
Now that $500 lands on your shoulders too, plus the full employee share, plus a small administrative fee of up to 2 percent.
A family plan that felt manageable at $200 a month can suddenly run past $1,400.
Average premiums for employer-sponsored family coverage have climbed past $25,000 a year, according to the latest KFF survey.
So a newly laid-off worker could be staring down roughly $2,000 a month just to keep the same doctors and network.
For households already tightening their belts, COBRA often becomes the first expense to get cut, even though dropping it means going uninsured.
The first is to check whether you qualify for a premium tax credit through the Affordable Care Act marketplace.
If your income drops after a layoff, you may suddenly qualify for subsidies that make a marketplace plan far cheaper than COBRA.
Many people assume they earn too much, but a mid-year job loss changes the calculation.
The second is to compare carefully before you decide.
Marketplace plans often have narrower networks, but the price gap can be hundreds of dollars a month.
Run the numbers on total yearly cost, not just the monthly premium.
You generally have 60 days from the date you lose coverage to elect COBRA, and you can often enroll retroactively if something goes wrong during that window.
Miss the deadline and the option disappears.
One more thing worth checking: some employers offer a severance package that covers COBRA for a few months.
If yours does, that's free coverage you shouldn't leave on the table.
If you're healthy and your income is low, a marketplace plan with subsidies usually wins.
If you have ongoing treatment and need to keep a specific specialist, COBRA may still be worth the premium.
There's no single right answer, only the one that fits your budget and your medical needs. **The bottom line:** COBRA protects you from a coverage gap, but it was never designed to be affordable.
Treat it as one option among several, and spend an afternoon comparing it against the marketplace before you sign anything.
Final Thoughts
A few hours of research can save you thousands over the year.