If you lost a job this year, the letter from your former employer's benefits office probably arrived with a number that made you sit down.
That number is your COBRA premium, and it is almost certainly higher than what came out of your paycheck.
COBRA lets you keep your workplace health plan for up to 18 months after leaving a job.
The catch: your employer no longer pays its share.
You now cover the full premium plus a small administrative fee, which is why a plan that cost you $180 a month can suddenly run $650 to $800 for individual coverage.
Family plans are where the math gets brutal.
According to 2024 employer survey data, average annual premiums ran about $8,951 for single coverage and $25,572 for family coverage.
Strip out the employer contribution, and a family could be looking at more than $2,100 a month just to stay insured.
That number lands at the worst possible moment, right when severance is running out and unemployment benefits replace only a fraction of a lost salary.
Rent or a mortgage, groceries that keep climbing, and credit card balances carrying 20%-plus interest are all competing for the same shrinking pool of dollars.
There is one piece of relief worth knowing.
The premium tax credit under the Affordable Care Act can now be used on marketplace plans even if your old job offers COBRA, a change that took effect in 2021 and remains in place.
For many households, a subsidized marketplace plan costs hundreds less per month than COBRA for similar coverage.
Before you decide, do three things in one afternoon.
Check whether your doctors and prescriptions are covered on a marketplace plan, compare the total annual cost rather than just the monthly premium, and look at the deductible you would actually have to meet.
A cheaper premium with a $9,000 deductible is not always the win it appears to be.
You generally have 60 days from the date of your coverage notice or loss of coverage to elect COBRA, and missing that window can mean waiting until the next open enrollment period.
If you let COBRA lapse without paying, you usually cannot restart it later.
Dental and vision are often separate line items that surprise people, adding $40 to $90 a month on top of the medical premium.
If you have a spouse or partner with employer coverage, compare adding yourself to their plan before defaulting to COBRA out of habit.
One more option: short-term health plans and health-sharing ministries advertise low monthly rates, but they can exclude pre-existing conditions and cap payouts.
Read the fine print before trading real coverage for a smaller bill.
If the premium is still out of reach, call your state's marketplace navigator service.
The help is free, and they can run the subsidy numbers with you in minutes.
The hard truth is that tying health coverage to employment was always a fragile arrangement, and COBRA simply hands you the full bill at the moment you can least afford it.
Compare every option, ask for help, and treat the 60-day window like the deadline it is.
Final Thoughts
A few hours of homework now can save your household thousands over the next year.