Then comes the letter offering you COBRA coverage, and the price tag that follows can feel like a second gut punch.
COBRA lets you keep your former employer's health plan for up to 18 months in most cases.
The catch: you now pay the full premium yourself, plus a 2% administrative fee.
That's why the average family premium under COBRA now runs north of $2,000 a month.
The math is brutal because it's not a discount program.
If your employer was covering 70% of a $25,000 annual family plan, you were paying roughly $625 a month.
On COBRA, that same coverage jumps to about $2,100.
Same doctors, same network, wildly different bill.
Individual coverage runs cheaper but still stings.
The average single-plan premium lands somewhere between $600 and $800 per month depending on your state, age, and plan design.
In high-cost states like New York or California, it can climb past $900.
What most people don't realize is that a special enrollment period opens the moment you lose job-based coverage.
That gives you 60 days to buy a marketplace plan, often with subsidies that COBRA can't touch.
For many households, an ACA plan with a premium tax credit costs hundreds less per month than COBRA — even with a higher deductible.
Switching plans can mean new networks, new deductibles, and starting your out-of-pocket spending from zero.
If you've already met your deductible mid-year or you're in the middle of treatment, COBRA's continuity can be worth the premium.
You have 60 days to elect COBRA, and coverage is retroactive to your termination date.
That means you can wait, see if you need it, and enroll later — as long as you haven't missed the deadline.
Use that window to compare marketplace options side by side.
A few money moves worth making: check whether your spouse's employer offers coverage, price out a marketplace plan with subsidies through HealthCare.gov, and look at short-term or association plans only with clear eyes about what they exclude.
Also confirm whether you qualify for Medicaid — income drops often open that door.
One more thing people miss: the 2% administrative fee is standard, but some employers cover it, and a few even subsidize COBRA temporarily as part of a severance package.
Always ask HR in writing before you assume the quoted number is final.
Dental and vision are usually separate line items under COBRA and can add $50 to $100 a month.
If you rarely use them, dropping those riders is one of the few places you can trim without touching major medical.
The bottom line: COBRA is a bridge, not a destination.
Treat it as a short-term stopgap while you find something cheaper, and don't let the sticker price scare you off comparing options in those first 60 days.
Our take: COBRA's value isn't the premium — it's the continuity.
Pay for it only when keeping your exact doctors and deductible progress genuinely matters, and shop the marketplace the same week you get that layoff letter.
Final Thoughts
A few hours of comparison shopping can save a household thousands over a single year.