When you lose a job, the letter arrives fast: you can keep your health insurance, thanks to a 1986 law called COBRA.
What the letter often buries lower down is the price.
You don't just keep paying your old premium share — you now owe the share your employer used to cover, plus up to a 2% administrative fee.
Average employer family coverage runs about $25,500 a year, according to the annual KFF survey.
Workers typically pay around $6,600 of that.
On COBRA, you'd owe closer to $26,000 — roughly $2,200 a month — for the same plan you had last week.
For a single person, average coverage costs about $8,950 a year, with workers paying around $1,360.
The COBRA bill lands near $9,100, or about $760 a month.
That's a mortgage payment before you've paid rent.
The pain is sharper because COBRA collides with everything else that's expensive right now.
Grocery bills remain well above pre-pandemic levels even as overall inflation cools.
Credit card APRs are hovering near record highs, and if you bridge a layoff by swiping a card, the interest compounds on top of an already unaffordable premium.
Many people assume COBRA is their only option.
Losing job-based coverage typically opens a special enrollment window — generally 60 days — to buy a marketplace plan, often with subsidies that COBRA can't match.
For a family of four earning $60,000, those tax credits can cut a marketplace premium dramatically.
There's one exception worth knowing: if you've already hit your deductible this year, COBRA can be oddly rational for a few months.
You keep the same doctors, the same network, and the same running total.
Switching plans restarts that deductible from zero, which can sting if you're mid-treatment.
You generally have 60 days to elect COBRA, and it's retroactive — so you can wait, see if you actually need care, and sign up later to cover a bill.
Some people use that window to line up a marketplace plan instead.
The catch: miss the election deadline and the option disappears.
Short-term plans look cheap in ads, but they can exclude pre-existing conditions and skip essential benefits.
A single hospital stay can blow past whatever you saved in premiums.
If you're weighing one, read the exclusions line by line, not the headline price.
If your income dropped, check whether your state expanded Medicaid.
In expansion states, a family of four can qualify below roughly $40,000, and the coverage is often free or near-free.
The practical move: don't pay the first COBRA invoice on autopilot.
Price a marketplace plan, check subsidy eligibility, and compare total yearly cost — premiums plus deductible plus out-of-pocket max — not just the monthly number.
Fifteen minutes on Healthcare.gov can save thousands.
COBRA was designed as a bridge, not a destination, and treating it that way is now a basic survival skill.
The letters aren't going away, but the assumption that you have no choice should.
Final Thoughts
Run the numbers before you sign — your wallet will notice the difference.