Then the paperwork arrives, and you find out what your old health plan really costs when your employer stops paying its share.
COBRA lets you keep your workplace coverage for up to 18 months, but you pay the full premium yourself — the employee portion plus whatever your company used to chip in, plus a 2% administrative fee.
For family coverage, that can easily run $1,800 to $2,500 a month, depending on the plan and where you live.
Here's the part that gets people: many assume COBRA is their only option.
The federal health insurance marketplace, Healthcare.gov, offers subsidized plans that can cost far less than COBRA — especially if your income drops after a layoff.
A household of four earning $70,000 might qualify for premium tax credits that cut monthly costs dramatically.
COBRA payments don't count toward those subsidies, which is a detail a lot of people discover too late.
You generally have 60 days to elect COBRA, and a separate window to enroll in a marketplace plan — but those windows don't line up neatly.
Miss the marketplace deadline and you may be locked out until the next open enrollment, leaving COBRA as your fallback.
Short-term health plans get marketed heavily to the newly unemployed, and they're cheaper for a reason.
They can exclude pre-existing conditions, cap payouts, and skip coverage for things like maternity care or prescriptions.
A $200 monthly premium sounds great until a single hospital visit wipes out the savings.
Dental and vision are another hidden cost.
Many COBRA elections bundle them in, but you can often drop those and keep medical coverage, saving $50 to $100 a month.
Call your plan administrator and ask — they rarely volunteer this.
If you or a spouse has coverage available through another employer, that's often the cheapest path.
Same goes for a parent's plan if you're under 26.
And if you're near Medicare age, COBRA and Medicare interact in ways that can create gaps, so talk to a benefits counselor before writing a check.
The people who benefit most from COBRA confusion aren't the families paying the bills.
It's the insurers collecting full-price premiums from people who don't know they have alternatives, and the brokers earning commissions on short-term plans that look affordable on paper.
One practical move: before you pay a single COBRA bill, spend an hour on Healthcare.gov comparing real numbers.
Then call your state's insurance department or a nonprofit navigator.
The difference between the first quote and the best option is often hundreds of dollars a month.
COBRA exists as a safety net, not a smart default.
Final Thoughts
Treating it as the automatic choice is how a temporary job loss turns into a year of financial damage.