When a layoff hits, the severance check feels like a cushion.
Then the COBRA paperwork shows up and the cushion gets a lot thinner.
For a growing number of white-collar workers who lost jobs in 2024 and 2025, keeping the same health plan through COBRA now costs more than their old rent in some cities.
COBRA lets you stay on your former employer's health plan for up to 18 months in most cases.
The catch: you pay the full premium yourself, including the share your employer used to cover.
That means a plan that felt cheap at $180 a paycheck can suddenly run $650 to $900 a month for individual coverage, according to KFF's annual employer benefits survey.
Family coverage often tops $1,800 to $2,200 a month.
A marketing manager in Dallas laid off in March told us her COBRA quote came in at $1,640 a month for her family of four.
She's now shopping the ACA marketplace instead, where subsidies tied to her lower projected income cut the bill to roughly $410 a month — but with a higher deductible and a narrower network.
Timing matters more than most people realize.
You generally have 60 days from the date your coverage ends to elect COBRA, and the coverage is retroactive to that end date.
That window is a gift: you can wait, see if a new job lands quickly, and still sign up later if you need care.
Just don't let a hospital bill pile up in the meantime without deciding.
The alternative most people overlook is the ACA marketplace.
A job loss counts as a qualifying life event, so you can enroll outside open enrollment.
Enhanced subsidies from the Inflation Reduction Act are still in effect through 2025, which means many households earning under roughly $60,000 for a family of four can find plans well below the COBRA sticker price.
The trade-off is often a higher deductible and a network that may not include your old doctors.
A few practical moves before you decide: ask HR for the exact COBRA premium in writing, not a verbal estimate.
Check whether your spouse's plan has an open enrollment window you can jump into.
Price marketplace plans at Healthcare.gov with your realistic 2025 income, not last year's salary, since subsidies are based on what you expect to earn.
And if you have ongoing prescriptions, compare formularies before you switch — a $30 drug can become a $300 one.
One more detail worth knowing: if your former employer had 20 or more employees, COBRA is federal law and they must offer it.
Smaller companies follow state mini-COBRA rules that vary widely.
Some states give you fewer months, some more.
People let the 60-day clock run out because the number on the page feels impossible, then they go uninsured and roll the dice.
That's the worst option on the table, and it's the one nobody advertises.
Our take: treat COBRA as a bridge, not a destination.
Price it, compare it against the marketplace, and pick the plan that keeps you covered while you figure out the next chapter.
Final Thoughts
A temporary hit to your budget beats a permanent hit to your savings if something goes wrong.