Then the COBRA paperwork shows up, and the price tag can feel like a second punch.
For many American households, keeping the health plan from a former employer now costs more than a car payment, and sometimes more than rent.
Here's why: under COBRA, you keep your old plan, but you also inherit the full premium.
Now you cover both shares, plus a small administrative fee of up to 2 percent.
That's why a plan that felt cheap at $180 a paycheck can suddenly cost $700 to $800 a month for a family.
According to industry surveys, average annual premiums for employer-sponsored family coverage have climbed past $25,000, with workers typically contributing around $6,500 of that.
Strip away the employer share and you're staring at roughly $2,000 a month in some states.
Individual coverage often lands between $500 and $800 monthly.
You usually get 60 days to decide, starting from the date your coverage would end or the day you receive the notice, whichever is later.
Miss that window and you're locked out until the next open enrollment.
That deadline pressure pushes a lot of people into overpaying for coverage they could get cheaper elsewhere.
The first move is checking HealthCare.gov or your state marketplace.
Losing job-based coverage counts as a qualifying life event, so you can enroll outside the normal window.
If your income drops, you may qualify for subsidies that cut marketplace premiums dramatically.
A plan that costs $700 through COBRA might run $150 or less with a tax credit.
Second, compare the actual coverage, not just the sticker price.
Marketplace plans often have higher deductibles, so run the math on your typical yearly medical spending.
If you're healthy and rarely see a doctor, a cheaper bronze plan can beat COBRA.
If you have ongoing prescriptions or a chronic condition, check that your doctors and medications stay in-network.
That's usually the cheapest route if it's offered.
They're cheaper but can exclude pre-existing conditions, so read the fine print carefully.
In the 40 states that expanded coverage, adults can often qualify based on income alone.
Fourth, don't ignore the payment plan option.
COBRA lets you pay monthly, and some administrators allow grace periods.
But miss a payment and coverage can vanish retroactively, leaving you on the hook for bills you thought were covered.
One more thing: if your former employer had 20 or more employees, COBRA is the law.
Smaller companies may fall under state mini-COBRA rules with different timelines and costs.
It's worth a quick call to your state insurance department to know which rules apply to you.
COBRA is convenient, and convenience has a price.
For most people who lose a job, it's the fallback, not the first choice.
Spend an afternoon comparing marketplace quotes before you sign that form.
The savings can easily run into thousands of dollars a year, money you'll want while you're between paychecks.
Our take: COBRA made sense in an era when switching plans meant losing your doctor.
Today, the marketplace and subsidy system give most households a cheaper path.
Final Thoughts
Treat the paperwork as a starting point for shopping, not a bill you have to accept.