Then the COBRA letter arrives, and the sting turns into a gut punch.
COBRA lets you keep your former employer's health plan for up to 18 months in most cases.
The catch: you now pay the full premium yourself, plus a small administrative fee.
Your old paycheck deduction was only your share.
KFF's annual employer survey puts average annual premiums at roughly $8,950 for single coverage and $25,600 for family coverage.
If your employer covered about 70 to 80 percent, your new COBRA bill could run $600 to $750 a month for just you — and well over $1,700 a month for a family.
For many households, it's simply not doable.
The good news is you have options, and one of them is often dramatically cheaper.
The health insurance marketplace created by the Affordable Care Act offers subsidized plans, and losing job-based coverage counts as a qualifying life event.
You can enroll outside the normal open period.
Here's the part most people miss: those subsidies are based on income, not assets.
A household of four earning around $60,000 could qualify for premium tax credits that cut monthly costs sharply.
Some families find marketplace plans for a fraction of their COBRA quote.
You generally have 60 days from the coverage loss to elect COBRA, and a separate 60-day window to pick a marketplace plan.
If you have a spouse or partner with employer coverage, joining their plan is usually the cheapest route of all.
Losing your coverage opens a special enrollment window there too, typically 30 to 60 days.
Short-term plans look tempting online with low sticker prices, but they often skip prescription drugs, maternity care, and pre-existing conditions.
Read the fine print before handing over a card number.
For healthy people between jobs, a high-deductible marketplace bronze plan can serve as a bridge.
You'll pay more when you use care, but you're protected from catastrophic bills.
Pair it with a health savings account if the plan qualifies.
One more thing: if your income drops low enough, you may qualify for Medicaid in your state.
In the 40-plus states that expanded coverage, adults can enroll year-round with no premium at all.
COBRA often bundles them, but standalone plans can cost far less if you only need basic care.
Before you write that first COBRA check, spend an afternoon running the numbers.
Call your state's marketplace navigator — the help is free.
A few hours of homework can save you thousands over the next year and a half. **Our take:** COBRA is a safety net, not a smart default.
It exists so you don't have to panic, but for most laid-off workers, the marketplace or a spouse's plan wins on price.
Final Thoughts
Compare before you commit, because the difference can be the cost of a used car.