Then the letter arrives with the price of keeping your old health plan, and it gets worse.
The average COBRA premium for a family hit $2,212 per month in 2024, according to the Kaiser Family Foundation's annual employer survey.
Individual coverage averaged $745 monthly.
That's not a typo — it's your old employer's full plan cost, shifted onto your shoulders because your former boss no longer chips in their share.
The American Rescue Plan's 100% COBRA subsidy expired in 2022, and nothing has replaced it at the federal level.
So unless Congress acts, laid-off workers in 2025 are paying the sticker price out of pocket.
For many households, that's more than their rent or mortgage.
A family earning $60,000 a year would spend roughly 44% of gross income on COBRA alone.
That's why enrollment has always been low — only about 14% of eligible people take it, per Georgetown University research.
Where to look instead The Affordable Care Act marketplace is the first stop.
If your income drops after a layoff, you may qualify for premium tax credits that slash monthly costs dramatically.
A family of four earning $45,000 could see subsidies covering most of a silver plan.
Losing job-based coverage triggers a special enrollment period, so you have 60 days from the coverage loss to sign up — no need to wait for open enrollment.
If your partner has employer insurance, adding you and the kids during their plan's special enrollment window is often the cheapest route.
Compare that added premium against the marketplace before deciding.
In the 40 states that expanded eligibility under the ACA, adults qualify at up to 138% of the federal poverty line — about $20,783 for an individual in 2025.
If your income drops to zero while you job hunt, you may qualify immediately.
Applications are free and retroactive coverage is sometimes possible.
Short-term health plans look tempting, but read the fine print.
These policies often exclude pre-existing conditions, cap payouts, and skip essential benefits like maternity care or mental health.
They're cheaper for a reason, and one hospital stay can wipe out the savings.
When COBRA still makes sense There are real reasons to bite the bullet.
If you're mid-treatment with a doctor you trust, or you've already hit your deductible for the year, restarting with a new plan can cost more than the premium difference.
COBRA also keeps you in the same network, which matters for ongoing prescriptions and specialists.
Run the numbers both ways before walking away.
One more deadline to watch: COBRA gives you 60 days from the date you receive the election notice to decide.
You can even retroactively elect it if you end up needing care during that window — a useful safety valve if you're between options.
The bottom line: COBRA is a bridge, not a destination.
Treat it as a short-term stopgap while you line up marketplace coverage, a spouse's plan, or Medicaid.
Paying $2,200 a month for a year will drain an emergency fund faster than almost any other bill you'll face after a layoff.
Our take: the system puts laid-off workers in an unfair bind, and the price tag proves it.
But knowing your alternatives — and acting within those 60-day windows — can save thousands.
Final Thoughts
Don't let the first scary letter make the decision for you.