If you have ever gone without employer coverage between jobs, you have probably seen the pitch: health insurance for $87 a month, sometimes less than a phone bill.
Short-term health plans are having a moment.
They are heavily advertised on social media, pushed by brokers during open-enrollment season, and often surfaced to gig workers and early retirees hunting for a cheaper option than a marketplace plan.
The catch is buried in the fine print, and the fine print matters a lot.
A recent KFF analysis found that short-term plans routinely deny coverage for services that standard ACA plans are required to cover, including maternity care, prescription drugs, and mental health treatment.
Many come with annual or lifetime caps on what they will pay.
Some cap prescription coverage at a few thousand dollars a year, which sounds fine until a single specialty drug costs more than that in a month.
Here is the part that trips people up: these plans do not have to cover pre-existing conditions.
They can also look back through your medical history and reject you or charge more.
If you have ever been treated for back pain, high blood pressure, or anxiety, that can count against you.
A patient with a manageable condition can end up paying full price for care that an ACA plan would have covered.
A 40-year-old in decent health might quote out at $150 to $300 a month for a short-term plan versus $500 or more for a marketplace plan without subsidies.
For a freelancer or a laid-off worker bridging a two-month gap, that difference is not nothing.
But the gap is where the trouble lives, because a hospital stay or a surprise diagnosis can turn a cheap premium into five-figure bills.
There is also a sales angle worth noticing.
These plans are often marketed by licensed agents paid on commission, and some generate leads through aggressive online ads promising "Obamacare alternative" coverage.
In some cases the plans pay commissions two to three times higher than ACA marketplace policies.
That does not make the agents dishonest automatically, but it does explain the volume of ads.
If you are considering one, ask three questions before signing: What is the deductible and out-of-pocket maximum?
Is there a cap on prescription or hospital coverage?
Get the answers in writing, not over the phone.
What the industry is selling is the feeling of coverage.
What many buyers need is actual coverage.
Those are not the same product, and the price gap is the tell. ## Short-term plans can work as a genuine bridge for a healthy person covering a one- or two-month gap.
As a long-term substitute for real insurance, they hand the risk back to you.
Final Thoughts
The cheapest premium is rarely the cheapest outcome.