Then comes the letter from your former employer's HR department, explaining that you can keep your health coverage through COBRA—if you can stomach the price.
For millions of Americans, that price is now eye-watering.
COBRA lets you stay on your old workplace plan for up to 18 months after leaving a job.
The catch: you pay the full premium yourself, both the part your employer used to cover and your own share.
On top of that, you're often charged a 2% administrative fee.
The average family premium for employer-sponsored coverage ran about $25,000 a year in recent surveys from KFF, with workers typically covering roughly $6,500 of that.
Strip away the employer contribution and add the fee, and a laid-off worker could face $1,800 to $2,200 a month just to keep the same plan.
Individual coverage averages around $600 to $700 monthly under COBRA, though it varies widely by state, age, and plan.
Health care costs keep climbing faster than overall inflation.
Hospital prices, prescription drugs, and insurance administrative costs all feed into premiums.
Insurers have also been repricing plans after several years of pent-up demand for care following the pandemic.
When you're on COBRA, you absorb every one of those increases—no employer cushion, no negotiating power.
It gets worse for people who file claims.
Some COBRA enrollees report that their plan's deductible resets, even though they'd already met it earlier in the year.
That means paying out of pocket again before coverage kicks in.
Others discover their old plan's network changed, leaving their doctors out of network.
First, don't assume COBRA is your only option.
Losing job-based coverage triggers a special enrollment period on the Affordable Care Act marketplaces, usually 60 days from the date coverage ends.
Marketplace plans come with income-based subsidies that can slash premiums dramatically—sometimes to under $100 a month for a single person.
For many families, that beats COBRA by thousands.
Second, check whether you qualify for Medicaid.
In the 40-plus states that expanded eligibility under the ACA, a single adult earning under roughly $20,000 a year may qualify.
If you have ongoing medical needs and your old plan covers your doctors, COBRA might still win despite the cost.
But run the numbers: premiums, deductibles, copays, and drug coverage.
A marketplace plan with a low premium but a $9,000 deductible could cost you more in a bad year.
A spouse's employer plan, a part-time job with benefits, or a short-term health plan (with caveats—these often exclude pre-existing conditions) may fill the gap.
Some states also offer their own subsidized programs.
One more thing: COBRA deadlines are strict.
You generally have 60 days from the notice to elect coverage, and you can sometimes elect retroactively if you have a medical emergency during that window.
For households already squeezed by grocery bills, rent, and credit card interest, a surprise $1,500 monthly premium can force impossible choices.
Skipping coverage is a gamble that one hospital visit can turn into five-figure debt.
The bottom line: COBRA is a safety net, not a bargain.
Treat that enrollment letter as a starting point, not a verdict.
Final Thoughts
Spend an afternoon on Healthcare.gov and your state Medicaid site before you write a check—because the cheapest option is rarely the one your old employer is offering.