The letter arrives a few weeks after the layoff, and the number on it rarely matches what anyone expects.
COBRA lets you keep your old job-based health plan for up to 18 months in most cases, but you pay the full premium yourself — the part your employer used to cover, plus a small administrative fee.
KFF's annual employer survey puts average premiums at roughly $8,950 a year for single coverage and about $25,600 for family coverage in 2024, with employers picking up most of it.
Strip out the employer share and a family plan can run north of $2,000 a month.
Here's the part people miss: your old plan might not even be your cheapest option.
Subsidized ACA marketplace plans are often far less expensive, especially if your income drops after a job loss.
The catch is that the two paths are mutually exclusive — once you enroll in COBRA, you generally can't switch to a marketplace subsidy mid-year outside open enrollment.
You typically have 60 days to elect COBRA, and coverage can be retroactive to the day your job ended.
That sounds generous until you realize it also means a hospital bill from week three can follow you if you let the window lapse.
COBRA enrollees tend to be sicker and older than average, and they pay full freight.
Meanwhile, the federal COBRA subsidy that made coverage affordable during the pandemic expired long ago, and Congress has shown little appetite to revive it.
There are real alternatives worth pricing before you decide.
A marketplace plan with a subsidy, a spouse's employer plan, a short-term policy (with big coverage gaps), or a health sharing ministry (not insurance, and often excludes pre-existing conditions).
Each has trade-offs, and none is automatically right.
The practical move: get your COBRA paperwork, then immediately price a marketplace plan on HealthCare.gov with your projected income.
Compare the deductible, not just the premium.
A $700 monthly plan with a $9,000 deductible can cost you more than a $1,100 plan with a $2,000 deductible if anyone in the house actually gets sick.
One more thing: if you're healthy and expect a short gap, some people deliberately wait out the 60-day window as a free look.
That's a gamble, and it only works if nothing goes wrong.
Most financial advisors will tell you it's a bad one.
Our take: COBRA was designed for a world where job loss was brief and premiums were smaller.
Final Thoughts
Treat that letter as a starting bid, not a final answer, and do the marketplace comparison before the clock runs out.