Short-term health insurance is having a moment.
With monthly ACA marketplace premiums up sharply in many states and subsidies set to shift after 2025, search traffic for "cheap health insurance" keeps climbing.
The pitch is tempting: a plan for $80 or $120 a month when a marketplace plan quotes you $450.
Here's what that price gap actually buys.
Short-term plans, now often marketed as "short-term, limited-duration" coverage, were extended to offer up to 12 months of coverage under a 2024 federal rule, and insurers can renew them for up to 36 months total.
They are not required to cover pre-existing conditions, prescription drugs, maternity care, or mental health treatment.
They can also reject you outright for a past diagnosis.
These plans are mostly sold by licensed agents working on commission, and the commissions run higher than on ACA plans, which is why you'll see aggressive ads and cold calls.
Some websites look nearly identical to HealthCare.gov and steer you into a plan that never touches the marketplace.
A Commonwealth Fund analysis of federal data found short-term plans denied roughly one in five claims in a recent year, compared with about one in eight for ACA marketplace coverage.
Investigative reporting from ProPublica and others has documented patients stuck with six-figure hospital bills after insurers argued a condition was pre-existing or fell outside the policy's limits.
A typical short-term policy may cap what it pays per day, per hospitalization, or per year, so a single surgery can blow past the cap.
Drug coverage is often a fixed discount card rather than insurance.
And there's no out-of-pocket maximum in the way ACA plans have one, so your exposure is technically unlimited.
Genuinely healthy people with a short gap, maybe between a job and a new one, who understand they're buying catastrophic-lite coverage and have savings to cover the middle.
It can beat going uninsured for a few weeks if the alternative is nothing.
It is a bad fit if you take any maintenance medication, are pregnant or might become pregnant, manage a chronic condition, or would struggle to absorb a $20,000 surprise bill.
If you're in one of those buckets, a full-price marketplace plan often costs less in the end than the "cheap" one plus one bad hospital visit.
Before you buy anything, do three things.
Check whether you qualify for subsidies at HealthCare.gov, since a large share of enrollees still get plans for under $50 a month after tax credits.
Confirm the plan's actual out-of-pocket maximum and drug coverage in the policy documents, not the sales page.
And verify the agent or broker is licensed in your state.
If a caller says you're "losing your plan" and offers a limited-time deal, slow down.
That script is a sales tactic, not a notice.
The uncomfortable truth is that short-term plans are cheap because they're allowed to be selective, and the people most likely to need care are the ones they're built to avoid.
They aren't a scam in the legal sense, but the marketing often is.
Final Thoughts
Treat the low premium as the start of your research, not the end of it.