For the millions of Americans who get laid off each year, continuing their employer health plan under COBRA sounds like the safe move.
Keep the same doctors, same network, same coverage.
Then they open the envelope and see the number: often $700 to $2,400 a month for a family, according to KFF's latest employer health benefits data.
When you're employed, your company typically covers most of the premium.
On COBRA, you pay the full tab plus a 2% administrative fee.
Average annual premiums for family coverage hit roughly $25,000 in 2024 — meaning a laid-off worker could owe about $2,100 a month just to stay insured.
Unemployment benefits in most states replace a fraction of a paycheck, often capped well below what a family plan costs.
A single month of COBRA can wipe out weeks of jobless aid.
The sticker shock is pushing people toward alternatives.
The Affordable Care Act marketplaces offer subsidies based on income, and a layoff usually counts as a qualifying life event to enroll outside open season.
For many families, a marketplace silver plan can cost hundreds less per month than COBRA — though networks and deductibles may differ.
Short-term health plans and health-sharing ministries look cheaper on paper, but they often exclude pre-existing conditions and skip essential benefits.
That's a gamble when a single hospital stay can run five figures.
Timing matters more than most people realize.
COBRA gives you 60 days to elect coverage — and if you enroll retroactively, you can even get care that already happened covered.
Miss that window and you may be locked out until the next open enrollment period.
One underused tool: if your former employer had 20 or more workers and your plan is ending, you can shop ACA coverage with subsidies that could cut your premium dramatically.
A licensed navigator or the federal marketplace can run the numbers in minutes.
There's also a quieter option some workers overlook — checking whether a spouse's plan offers a special enrollment window, or whether a state Medicaid program now covers your household at little or no cost.
The takeaway for anyone staring down a layoff: do the comparison before the COBRA paperwork lands, not after.
Our take: COBRA was designed as a bridge, not a life raft, and treating it like one is how savings disappear.
If you lose a job, price the marketplace and Medicaid first — then use COBRA only if it genuinely wins on cost and doctors.
Final Thoughts
The system rewards people who shop fast, and punishes the ones who just sign the form.