If you've ever been laid off, you've probably heard the pitch: keep your employer's health plan through COBRA.
What the paperwork doesn't shout at you is the price.
Under COBRA, you keep the coverage — but you also inherit the full premium, the part your employer used to quietly pay.
Most workers only ever see their own payroll deduction, maybe $150 or $200 a month for a family plan.
The real cost of that same plan often runs $1,500 to $2,000 or more per month once the employer's share disappears.
Add a 2% administrative fee on top, and you're looking at numbers that rival a mortgage payment.
For a single person, it can still land in the $500 to $700 range depending on the plan and the state.
Here's the catch that trips people up: COBRA isn't a discount program.
You're not getting a deal — you're just getting the option to pay retail.
Insurance companies didn't suddenly get generous.
Your former employer simply stopped subsidizing you, and nobody printed that in bold on the envelope.
The employer gets to say it offered continuation coverage, which federal law requires for most companies with 20 or more workers.
And the newly unemployed person gets a bill that arrives whether or not the next paycheck does.
There are escape hatches, but they're easy to miss.
If you lose job-based coverage, you typically qualify for a special enrollment period on the Health Insurance Marketplace, usually 60 days before and after the loss.
Marketplace plans often come with subsidies based on your new, lower income — which, counterintuitively, can make them far cheaper than COBRA.
A family that was paying full freight through COBRA might qualify for a plan at a fraction of the cost, sometimes with similar networks.
Medicaid is the other door people forget to try.
In states that expanded coverage, a sudden income drop can push you under the eligibility line, and the application is free.
Some people qualify and never bother to check because they assume they earn too much — based on the job they no longer have.
Timing matters more than most people realize.
You generally have 60 days from the date coverage would end to elect COBRA.
But electing isn't always the smart move — you can sometimes enroll in a marketplace plan instead, and if you have a gap, a short-term or marketplace plan may bridge it for less.
There's also a quiet trap: if you elect COBRA and then drop it mid-year, you may not get another special enrollment window to switch to a marketplace plan until the next open enrollment.
People who panic-sign the COBRA form in week one sometimes lock themselves into months of premiums they can't afford.
The practical move is boring but effective.
Before you mail anything back, price three things side by side: the COBRA number, a marketplace plan with your new income plugged in, and whether you qualify for Medicaid.
Compare total monthly cost, deductible, and whether your doctors are in network.
None of this is a knock on keeping your doctors or your plan.
Continuity has real value, especially mid-treatment.
But "keep your insurance" gets sold like a courtesy when it's often the most expensive option on the table.
The system isn't rigged against you so much as it's designed to make the default choice the costly one.
Final Thoughts
Read the number, then shop before you sign.