If you have ever shopped for health coverage outside the Affordable Care Act marketplace, you have probably seen the pitch: a plan for $89 a month, no waiting for open enrollment, "major medical" in big letters.
It looks like a life raft for anyone staring down a $700 monthly premium.
It is also one of the most complained-about products in American insurance, and the gap between what it costs and what it pays is the entire business model.
Start with the price, because that part is real.
Short-term plans can run a fraction of an ACA plan, and in 2024 the Biden administration capped their duration at three months, with renewal limited to four months total in most cases.
The Trump administration is expected to revisit that rule, and insurers are already circling.
That is your first clue about who benefits: not you, necessarily, but a company that collects premiums for a few months and hands out a thin card in return.
Here is what the card usually does not buy.
Short-term plans are not required to cover pre-existing conditions, prescription drugs, maternity care, mental health, or preventive visits.
They can cap what they pay per day, per surgery, or per year.
A 2020 study in Health Affairs found that nearly half of short-term plan enrollees who used their coverage faced bills the plan did not pay, and the median denied claim ran over $1,000.
The people who get hurt most are the ones the marketing targets: freelancers, gig workers, people between jobs, early retirees not yet on Medicare.
A 58-year-old with well-controlled blood pressure can pass the screening in March and be denied a renewal in June for the same condition, then be stuck shopping mid-year with a fresh diagnosis on their record.
Meanwhile, the ACA still guarantees coverage regardless of health history, and enhanced subsidies have made marketplace plans cheaper for millions of households.
For many people, the cheap plan is not actually the cheap plan.
None of this means the plans are worthless in every scenario.
A healthy 26-year-old who needs a bridge for two months before a job starts is a different risk than a family of four with a kid who plays sports.
The trouble is that the sales pitch rarely makes that distinction.
Brokers earn commissions, lead-generation sites earn per click, and the phrase "PPO network" gets used loosely enough that people assume their doctor is included when the network is a discount card with extra steps.
Check the plan's out-of-pocket maximum, not the premium.
Search the insurer's name plus "complaints" and read state insurance department actions.
And price the same coverage on HealthCare.gov with subsidies applied — the gap is often smaller than the ads imply.
If a plan refuses to cover a pre-existing condition, ask yourself what happens the first time you actually get sick.
The uncomfortable truth is that short-term plans exist because American health coverage is genuinely unaffordable for a lot of working people.
That is a real problem, and the plans are a profitable answer to it rather than a solution.
Final Thoughts
Shop like the seller is betting you will stay healthy for exactly as long as you are enrolled — because that is the bet.