Then the COBRA bill shows up, and the sting turns into a punch to the gut.
For millions of Americans between jobs, continuing their employer health plan sounds like the safe move — until they see the price.
COBRA lets you keep your old workplace coverage for up to 18 months after leaving a job.
The catch: your employer stops paying its share.
You now cover the full premium, plus a 2% administrative fee.
That's the number most people never see while employed.
According to 2025 data from the Kaiser Family Foundation, the average annual premium for employer-sponsored family coverage runs about $27,000.
Workers typically pay roughly $7,000 of that.
On COBRA, you'd owe close to the entire $27,000 — around $2,250 a month.
For single coverage, the full annual cost averages about $9,300, or roughly $775 monthly with the admin fee baked in.
That's a mortgage payment in much of the country.
For a household already stressed by a layoff, it's often impossible.
Here's the part that trips people up: COBRA isn't automatically cheaper just because it's your old plan.
The premiums are set by your former employer's insurer, not by your income.
A six-figure severance package doesn't get you a discount.
The 2021 stimulus law once made COBRA nearly free, with the government covering 85% of premiums for six months.
Nothing similar is in place for 2026, so laid-off workers are back to paying full freight.
First, check the Health Insurance Marketplace at Healthcare.gov.
Job loss counts as a qualifying life event, which opens a special enrollment window.
Many households qualify for premium tax credits that slash monthly costs dramatically — sometimes to under $100 for a silver plan.
Second, compare deductibles and networks, not just sticker price.
A cheaper marketplace plan with a high deductible might still beat COBRA if you're generally healthy.
If you have ongoing treatment or a specific doctor, verify they're in-network before switching.
Spouse's employer plan, Medicaid (if your income dropped enough), and short-term plans are all worth pricing out.
Short-term plans are skimpy on coverage, so read the fine print carefully.
One more move: if you're healthy and between jobs, some people bridge the gap with a marketplace plan and keep receipts.
If you later land a job with coverage, you can drop the plan — but you can't retroactively join COBRA to cover a past medical bill.
The broader takeaway is that COBRA was designed for a different era, when job transitions were shorter and premiums were smaller.
Today it functions less like a safety net and more like a luxury product.
Knowing the real numbers before the envelope arrives is the difference between a stressful month and a financial crisis.
For anyone staring down that bill: get quotes from at least three sources, and do it in the first two weeks after your job ends.
The 60-day COBRA election window feels generous until you realize how fast a marketplace application can move.
Final Thoughts
Speed matters more than loyalty to your old plan.