Millions of Americans are staring down another year of rising premiums, and a growing number are typing the same phrase into search bars: cheap short-term health insurance.
These plans were expanded under a 2018 federal rule that lets insurers sell policies lasting just under 12 months, renewable for up to 36 months in many states.
Both sides agree on one thing: the fine print matters more than the sticker price.
Here's why the plans are suddenly popular again.
Average marketplace premiums climbed roughly 20 percent heading into 2023 and kept climbing in many states since, according to KFF's annual employer and marketplace surveys.
For a family of four earning too much for subsidies, that can mean a monthly bill that looks more like a car payment.
A short-term plan might quote $150 a month for the same household.
That gap is exactly what makes these policies so tempting — and exactly why consumer advocates want you to slow down before clicking buy.
What you give up is the part the ads don't lead with.
Short-term plans are not required 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 review your medical history before approving a claim — or rescind coverage if you left something off the application.
A 2020 study in the journal Health Affairs found that about half of short-term plan enrollees who used significant care ended up with medical bills their policy didn't fully cover.
You can feel healthy when you sign up, then get diagnosed with something in month three.
When the policy term ends, the insurer can simply decline to renew you.
That's the opposite of how ACA-compliant plans work, where you can't be turned away or charged more because of your health history.
They can make sense as a bridge — say, you're between jobs for 60 or 90 days and want protection against a catastrophic accident, not routine care.
They're also used by some early retirees waiting for Medicare at 65.
In those narrow windows, a cheap policy that covers a hospital stay after a car crash beats no coverage at all.
The math falls apart when you treat them as a permanent substitute for real insurance.
First, check whether you qualify for marketplace subsidies — many people who assume they earn too much actually don't, and the enhanced subsidies have changed that calculation for a lot of households.
Second, read the exclusions page, not the brochure.
Look specifically for pre-existing condition language, annual caps, and prescription coverage.
Third, price out a bronze marketplace plan next to the short-term quote.
The difference is often smaller than the ads imply once you factor in what's actually covered.
If you're healthy, between coverage, and clear-eyed about the limits, a short-term plan can serve a purpose.
If you have any ongoing condition, take regular medication, or might start a family, the savings are usually an illusion.
Final Thoughts
The hospital bill is where the real story gets written.