Millions of Americans get a rude shock when they leave a job and ask HR what it costs to keep their health plan.
The answer is often two to three times what they were paying as an employee, because employers typically cover the majority of premiums — and that subsidy vanishes the moment you walk out the door.
Under COBRA, you keep the same plan, same doctors, same network.
You also inherit the full premium plus a small administrative fee, usually 2 percent.
For a family plan that an employer was quietly funding at $1,800 a month, you might now owe close to $1,900 out of your own pocket.
That's not a typo, and it's not a rare edge case.
According to KFF's annual survey of employer health benefits, average annual premiums for family coverage have pushed past $25,000 in recent years, with workers contributing roughly $6,500 and employers eating the rest.
Lose your job and that employer share becomes your problem.
A single person on a mid-tier plan can easily stare down $700 to $900 a month.
Here's the part that surprises people: COBRA isn't a government program.
It's a federal law that forces larger employers to let you stay on their plan temporarily — generally 18 months, sometimes longer for certain life events.
Nobody is doing you a favor, and your old company isn't losing money on the arrangement.
If you're mid-treatment, pregnant, managing a chronic condition, or your doctors aren't in any Affordable Care Act marketplace network near you, switching plans can mean starting over with new referrals and new prior authorizations.
Sometimes paying the premium is cheaper than the medical bills a gap in coverage would trigger.
But for plenty of households, COBRA is a trap dressed as safety.
Marketplace plans sold on HealthCare.gov often come with subsidies based on your income — and a layoff year is frequently a low-income year.
That means you might qualify for a plan at $200 a month instead of $900, with deductibles that are higher but premiums that don't require a second mortgage.
You generally have 60 days from your coverage end date to elect COBRA, and losing job-based coverage opens a special enrollment window for marketplace plans.
Miss either deadline and you can be locked out until the next open enrollment.
Also worth knowing: if you elect COBRA and then drop it, you can't always jump to a marketplace plan mid-year without a qualifying event.
Some employers, especially smaller ones, aren't required to offer COBRA at all.
Companies with fewer than 20 employees typically fall outside the federal rule, though some states have their own mini-COBRA laws with different rules and durations.
Insurance carriers collect the full premium either way.
And the people selling short-term health plans — skimpy policies that can deny coverage for pre-existing conditions — count on panic to close sales.
Read the fine print before you sign anything in the first stressful week after a layoff.
Our take: COBRA is a bridge, not a destination.
Price it against a subsidized marketplace plan before you commit, and treat the 60-day window like a hard deadline, because it is.
Final Thoughts
The system isn't designed to be kind to people between jobs — it's designed to keep premiums flowing, and knowing that is half the battle.