For laid-off workers, the sticker shock arrives fast.
The average family premium on COBRA now runs north of $1,900 a month, and even single coverage can top $700 — often more than a mortgage payment.
That's the reality facing thousands of Americans who lose a job and assume the old workplace plan will simply carry over.
COBRA lets you keep your employer's health coverage for up to 18 months after leaving a job.
The catch: your company stops paying its share.
You inherit the full premium plus a 2% administrative fee.
What felt like a $150 payroll deduction suddenly becomes a four-figure monthly bill.
The math is brutal for households already stretched thin.
A 2024 KFF analysis put average annual premiums at roughly $8,950 for single coverage and $25,570 for family plans, with employers historically covering most of that.
Strip away the subsidy and the true cost hits your bank account directly.
If you enroll in an Affordable Care Act marketplace plan instead, you may qualify for subsidies based on your new, lower income.
A layoff drops your household earnings, which can unlock premium tax credits worth hundreds of dollars a month.
For some families, a marketplace silver plan costs less than half of COBRA.
Timing matters more than most people realize.
Losing job-based coverage triggers a special enrollment window of 60 days to pick a marketplace plan.
Miss it and you may be stuck waiting until open enrollment in the fall.
COBRA also comes with its own 60-day election deadline, and you can often enroll retroactively if you change your mind.
Dental and vision are usually separate line items, and they add up fast.
Prescription drug tiers, deductibles, and out-of-network rules stay exactly as they were — no improvement, just a bigger bill.
One hospital stay can still leave you on the hook for thousands.
Some states run their own mini-COBRA programs for small employers, and a few offer premium assistance for low-income residents.
It's worth a call to your state insurance department before you assume you're out of options.
If you're healthy and rarely use care, a high-deductible marketplace plan paired with an HSA can beat COBRA on total cost.
If you have ongoing treatment or a preferred doctor, keeping the same network may be worth the premium.
Run both numbers side by side before deciding.
Our take: COBRA is a safety net, not a bargain.
Treat the 60-day window as a hard deadline, price a marketplace plan the same week you get the layoff news, and don't let loyalty to your old doctors quietly drain your savings.
Final Thoughts
The cheapest option is usually the one you research before the first bill lands.