With marketplace premiums projected to rise again for 2026, a lot of Americans are opening their mail and doing a double take.
The average benchmark plan is expected to cost roughly 26% more next year in many states, according to KFF's latest analysis, with some enrollees facing increases well into triple digits once enhanced subsidies expire.
That sticker shock is pushing more people to search for something cheaper — and short-term health insurance keeps showing up in those searches.
Short-term health insurance is a type of policy designed to fill a gap, not replace full coverage.
Under federal rules, plans can last up to 12 months and be renewed for up to 36 months total, though a handful of states cap terms at three or six months.
They're typically cheap for a reason: premiums can run $100 to $200 a month for a healthy adult, versus $500 or more for a marketplace plan.
These policies generally don't have to cover pre-existing conditions, prescription drugs, maternity care, or mental health services.
Insurers can also review your medical history and reject you outright.
If you get diagnosed with something serious after enrolling, the plan may decline to pay for treatment related to that condition — a gap that has left plenty of families staring down five-figure hospital bills.
There's another catch that trips people up: short-term plans are not "minimum essential coverage." That means paying for one doesn't get you out of the individual mandate penalty in states that still have one, like California, Massachusetts, New Jersey, Rhode Island, and D.C.
You could owe a state tax penalty on top of your premiums.
A healthy 28-year-old between jobs for two months, someone waiting for employer coverage to kick in, or a person who missed open enrollment and needs a bridge until the next window.
They can also work as a supplement for travel or a temporary gap before Medicare starts.
What they're not good for is managing an ongoing condition like diabetes, heart disease, or cancer — the exact situations where people need real coverage most.
If you're shopping, a few practical moves help.
Check whether your state restricts plan lengths, since rules vary widely.
Read the exclusions list before you buy, not after a claim is denied.
Compare the total yearly cost, not just the monthly premium, and look up each plan's NAIC complaint ratio.
And remember that losing job-based coverage or moving counts as a qualifying life event, which opens a special enrollment window on Healthcare.gov — often a better path than a temporary fix.
One more thing worth knowing: starting in 2026, new federal rules require clearer disclosures on these plans, so the limits should be easier to spot before you sign.
That's a small win for shoppers who've been burned by vague brochures.
The bottom line: short-term coverage is a tool, not a solution.
Used for a genuine gap of a few months, it can save real money.
Used as a permanent substitute for comprehensive insurance, it can quietly leave you exposed right when you can least afford it.
Final Thoughts
Read the exclusions, run the math on a worst-case year, and decide with your eyes open.