The pitch lands in your inbox around open enrollment: health coverage for $87 a month, no networks to worry about, sign up in ten minutes.
Compared with a $600 marketplace premium, it looks like the deal of the year.
Then you read the fine print, and the math changes fast.
Short-term health insurance was designed as a stopgap — coverage for people between jobs or waiting on employer benefits.
Federal rules loosened in 2018 let insurers sell plans lasting up to 364 days instead of three months, and the market responded with ads aimed squarely at healthy people hunting for a bargain.
A KFF analysis found that in 2023, about 1 in 5 people who bought coverage on their own had short-term or other non-ACA-compliant plans.
That's millions of Americans holding policies that can legally exclude maternity care, mental health treatment, prescription drugs, and care for any condition you've already had.
One insurer's application asked applicants to list prior diagnoses stretching back a decade.
These plans screen for health problems upfront, so they work fine until you actually get sick.
A cancer diagnosis, a pregnancy, or a chronic condition can become a "pre-existing" exclusion — meaning the plan pays nothing for the exact care you bought it for.
Some policies cap total annual payouts at $250,000 or less, which a single hospital stay can blow through.
There's also fine print on what counts as emergency care.
Many plans require you to call for pre-authorization before going to the ER, or they'll deny the claim.
Roughly a dozen states, including California, New York, and Colorado, now ban or sharply limit these plans.
Complaint data collected by the nonprofit US PIRG found consumers reporting denied claims for surgeries, ER visits, and even routine care they believed was covered.
The brokers selling these policies often earn commissions of 20% or more, which helps explain the relentless Facebook and YouTube ads.
The person on the phone isn't a neutral advisor.
If you're between jobs, check Healthcare.gov first.
Enhanced ACA subsidies have made marketplace plans cheaper for many households, and losing a job counts as a qualifying life event — you don't have to wait for open enrollment.
If you're 26 and aging off a parent's plan, or retiring before Medicare kicks in at 65, run the numbers on a marketplace bronze plan before assuming short-term is your only option.
And if you do buy a short-term policy, read the exclusions page.
None of this means every short-term plan is a scam.
For a healthy 28-year-old bridging a two-month gap, it can pencil out.
The problem is that the people most likely to need real coverage are the ones these plans are built to avoid.
The real question isn't whether the premium is low.
It's who's pocketing the difference — and whether you'll find out at the worst possible moment.
Final Thoughts
Cheap insurance that vanishes when you need it isn't insurance.