The short answer
COBRA lets you keep the exact health plan you had at work after you leave a job, but you pay the full premium plus a 2 percent administrative charge — up to 102 percent of the total cost. While you were employed, your company likely covered most of that premium, so the number you see on the COBRA notice is often two or three times what was coming out of your paycheck. That is why it feels like sticker shock even though the coverage did not change.
So COBRA is not more expensive coverage; it is the same coverage with the employer subsidy removed and the true cost finally visible to you.
What the real dollars look like
The Kaiser Family Foundation tracks average employer premiums each year, and the full cost of family coverage runs well over 20,000 dollars a year, with the worker normally paying only a slice of it. On COBRA you pick up the whole thing, so a plan that cost you a few hundred dollars a month can jump past a thousand. Nothing about the benefits changes; only who pays does.
Because the amount is the full unsubsidized premium, COBRA is most painful for family coverage and for higher-cost employer plans.
Why an ACA plan is usually cheaper
A job loss opens a special enrollment period on the ACA Marketplace, and Marketplace plans come with income-based subsidies that COBRA never offers. For many households the subsidized ACA premium is a fraction of the COBRA price for comparable coverage. Our side-by-side breakdown in COBRA vs. the Marketplace after a job loss walks through how to compare them, and our subsidies guide explains how the help is calculated.
The takeaway: get the COBRA number, then price a subsidized individual plan before you decide — the difference is often large.
Frequently Asked Questions
Why is COBRA so expensive?
You pay 100 percent of the premium plus a 2 percent administrative fee. Your employer used to cover most of the premium, so COBRA reveals the plan's full unsubsidized cost.
Is COBRA cheaper than an ACA plan?
Usually not. A job loss opens an ACA special enrollment period with income-based subsidies that COBRA does not offer, so a subsidized Marketplace plan is often far cheaper for comparable coverage.
How long does COBRA last?
Generally up to 18 months after most job-related qualifying events, and longer in certain cases like disability or a second qualifying event.
Free Consultation
Have Questions About Your Situation?
Every Medicare situation is different. Our Wyoming and Utah advisors provide free, personalized guidance — no pressure, no obligation.