If you lost a job, missed open enrollment, or just got quoted a jaw-dropping price for an Affordable Care Act plan, you've probably seen ads for short-term health insurance.
The pitch sounds great: real coverage in 24 hours, premiums that can run a fraction of a marketplace plan.
More than 3 million Americans have signed up for these policies in recent years, and enrollment keeps climbing as household budgets get squeezed.
But there's a catch that doesn't show up in the flashy banner ads.
Short-term plans are not required to cover pre-existing conditions, prescription drugs, maternity care, or mental health treatment.
They often cap how much they'll pay out in a year, and they can ask you detailed questions about your health history before issuing a policy.
If you had a knee replacement in 2022 or take a daily blood pressure pill, the application could come back denied.
A 40-year-old in Texas might see a short-term plan quoted at $150 a month versus $450 for a marketplace plan.
For a family watching grocery bills climb and rent eat up half their paycheck, that gap is hard to ignore.
The trade-off is that the cheaper plan may leave you exposed to tens of thousands of dollars in bills if something serious happens.
State rules vary widely, and that's where things get confusing fast.
Some states, including California and New York, have essentially banned these plans or limited them to three months.
Others allow coverage for up to 12 months, with renewals that can stretch it even longer.
That means the same policy could be legal in one state and off the market in the next.
Short-term plans don't count as qualifying coverage under the ACA, so enrolling in one won't exempt you from the penalty-free window that lets you buy a marketplace plan later.
Miss your special enrollment period, and you could be locked out until next November.
Hospitals and clinics may also treat you as self-pay, which can mean higher bills and more paperwork.
If you're considering one of these policies, read the fine print before you type in a credit card number.
Look specifically for the annual maximum benefit, the deductible, whether prescriptions are covered, and what happens if you get diagnosed with something serious mid-policy.
Ask whether the plan covers hospital stays at in-network facilities near you, because a "nationwide network" often means you pay out of pocket until you hit a deductible.
And check your state's insurance department website, since rules shift almost every year.
A short-term plan can make sense as a bridge if you're healthy, between jobs, and need something for a few months while you wait for employer coverage to start.
It's a much shakier bet if you have ongoing medical needs, take expensive medications, or want peace of mind that a surprise diagnosis won't wreck your savings.
The cheapest premium on the screen isn't always the cheapest decision.
Our take: these plans aren't a scam, but they're also not a substitute for real insurance, and too many people find that out from a hospital bill instead of a brochure.
Final Thoughts
If you're shopping on price alone, spend 20 minutes reading the exclusions first.