Short-term health insurance is having a moment.
These plans advertise premiums that can run a fraction of what Affordable Care Act coverage costs, and with Obamacare subsidies set to expire at the end of 2025 unless Congress acts, a lot of Americans are about to start shopping.
The pitch is simple: pay less each month, get covered fast.
The catch is what you're actually buying.
Short-term plans, often marketed as "temporary" or "gap" coverage, don't have to cover pre-existing conditions, prescription drugs, maternity care, or mental health treatment.
They can cap how much they'll pay out per year, and they can rescind your policy if you made an honest mistake on your application.
A 2024 KFF analysis found that nearly three in four people who buy short-term plans could get ACA marketplace coverage for the same price or less once subsidies are factored in.
That flips the whole sales pitch on its head.
The plans look cheap because the comparison is usually against the full sticker price of a marketplace plan, not the subsidized price most households actually pay.
Short-term plans were originally limited to three months under a 2016 rule, then extended to just under 12 months under the Trump administration in 2018.
The Biden administration cut that back to four months in 2024.
The rules keep shifting, which means the coverage you buy today may not be renewable in the same form next year.
You can be healthy when you enroll and uninsurable when you need to reapply.
But also the brokers and lead-generation sites that earn commissions on every enrollment.
Search "cheap health insurance" and you'll wade through a swamp of comparison sites that look independent but are paid per signup.
Some won't even show you marketplace plans, because the commissions are lower.
None of this means short-term coverage is always a mistake.
If you're between jobs, waiting on employer coverage to kick in, or you're young and healthy and genuinely can't afford anything else, a few months of catastrophic protection beats nothing.
Just know what you're getting: a discount card with a ceiling, not real insurance.
Check healthcare.gov first and enter your actual income, because the subsidy number is the one that matters.
Read the "exclusions" and "limitations" sections, not the brochure.
And ask the agent, in writing, what happens if you get diagnosed with something expensive in month two.
The honest takeaway: short-term plans aren't a scam, but they're sold like one.
The savings are real and so is the exposure, and the people earning commissions have little incentive to explain the difference.
Final Thoughts
If a plan is dramatically cheaper than everything else, something is being left out, and it's usually you.