Health insurance open enrollment is here, and the sticker shock is real.
Premiums on the Affordable Care Act marketplaces are up again, with some states seeing double-digit increases.
In response, a growing number of Americans are typing "cheap health insurance" into search bars and landing on short-term plans that promise low monthly payments and fast approval.
Here's the catch: those plans are cheap for a reason.
They're not required to cover the ten essential benefits that ACA plans must include.
That can mean no maternity care, no mental health coverage, no prescription drug benefit, and no coverage at all for pre-existing conditions.
Insurers in most states can also deny you outright if you have a history of cancer, diabetes, or even a past injury.
The sales pitch rarely leads with any of that.
What you'll see instead is a sleek website, a monthly premium that looks like a rounding error compared to your old plan, and a "get covered in minutes" button.
Some of these sites are run by licensed brokers.
Others are lead-generation operations that sell your phone number to whoever pays.
A few have been fined by state regulators for using logos and names that mimic the federal marketplace.
Short-term plans are profitable precisely because they enroll people who expect to stay healthy and pay out less when they don't.
If you get sick or hurt, the plan can cap what it pays, rescind coverage if you misstated anything on the application, or simply decline to renew you when the term ends.
That doesn't make every short-term plan a scam.
For some people, a bridge policy makes sense: a healthy 28-year-old between jobs, someone waiting for employer coverage to kick in, or a person who missed open enrollment and needs something before the next window.
If you go this route, read the actual policy document, not the marketing page.
Check the deductible, the out-of-pocket maximum, the drug formulary, and whether the plan uses a narrow network of providers you actually use.
A licensed agent with a state license number is a different animal from a call center that transfers you three times.
And if a plan advertises "Obamacare-compliant" pricing without being an ACA plan, walk away.
The bigger issue is what this trend says about the market.
When legitimate coverage gets too expensive for middle-income households, the alternative market fills the gap with products that look like insurance but behave more like a coupon book with a monthly fee.
That's not a knock on people trying to save money.
It's a knock on a system where the affordable option and the reliable option keep drifting further apart.
Before you click buy on a plan that costs less than your phone bill, run the math on what a single hospital stay would do to your savings.
Final Thoughts
If the answer is "wipe it out," the cheap plan isn't cheap—it's just deferring a bill you can't see yet.