Short-term health insurance sounds like a bargain until you actually need it.
These plans, which often cost a fraction of Affordable Care Act marketplace coverage, have quietly become a go-to option for Americans between jobs or priced out of traditional plans.
But the savings come with fine print that can leave you holding a five-figure hospital bill.
The core problem is that short-term plans aren't required to cover the ten essential health benefits that ACA plans must include.
That means no guaranteed coverage for prescription drugs, maternity care, mental health treatment, or pre-existing conditions.
Insurers can also reject you outright for a past diagnosis, and they can cap how much they'll pay in a year.
Many of these policies use something called post-claims underwriting.
You answer a few health questions when you sign up, and the insurer doesn't dig deeper until you file a claim.
At that point, they can comb through your medical records, find something you forgot to mention, and rescind the policy entirely.
Consumer advocates say this practice is rare but devastating when it happens.
Short-term plans typically last anywhere from one month to just under a year.
When your term ends, the insurer doesn't have to renew you, and it can raise your premium based on any new health issues that popped up.
If you got sick during the term, you may find yourself uninsurable when you need coverage most.
The insurers selling these plans, and the brokers earning commissions on them.
Enrollment in short-term plans has grown steadily, and some states have moved to restrict them while others allow them to be sold for up to three years at a time.
The Trump administration expanded access in 2018, and the market has ballooned since.
If you're considering one of these plans, read the exclusions section before you read the price.
Ask directly whether the policy covers hospital stays, prescriptions, and lab work, and whether the insurer can rescind coverage after you get sick.
A cheaper premium means nothing if the plan vanishes the moment you need it. **Our take:** Short-term plans aren't inherently a scam, but they're marketed as a safety net when they're really a gamble.
If you're healthy and just bridging a gap, they might pencil out.
Final Thoughts
If you have any medical history at all, the house usually wins.