Short-term health insurance is having a moment.
With ACA marketplace premiums climbing and deductibles that can swallow a month's rent, search interest in these stripped-down policies tends to jump every open enrollment season.
The pitch is simple: pay a fraction of what a marketplace plan costs, get covered for a few months, done.
The catch is buried in what these plans don't cover.
Short-term policies generally aren't required to cover pre-existing conditions, maternity care, mental health, or prescription drugs.
They can cap how much they'll pay out per year, and they can rescind your coverage if you made an honest mistake on your application.
Here's the part that rarely makes the sales page: if you get seriously sick or injured, the plan may pay a fixed dollar amount and then stop.
You're responsible for everything above it.
A single hospital stay can run into the tens of thousands.
The premium saved over six months can vanish in one afternoon in an emergency room.
Brokers earn commissions on them, and the commissions can be higher than on marketplace plans because there's less regulation on how they're marketed.
Some websites that look like neutral comparison tools are lead-generation machines that sell your phone number to agents.
If a site asks for your number before showing you a single price, that's the business model.
None of this means short-term plans are useless.
For a healthy 26-year-old between jobs, or someone waiting for employer coverage to kick in, a three-month bridge policy can beat going uninsured.
The key is knowing what you're buying: read the exclusions list, check the annual maximum, and confirm whether you'd need a separate prescription discount card.
If you have any ongoing condition — diabetes, asthma, a history of cancer, even a pending test — these plans will either deny you, exclude that condition, or charge more than a marketplace plan.
And starting in 2024, short-term plans can only last three months, with a maximum of four months total, though renewals vary by state.
The real comparison isn't short-term versus nothing.
It's short-term versus a subsidized marketplace plan.
Millions of people qualify for tax credits that bring bronze-tier premiums down to double digits per month, and those plans must cover pre-existing conditions.
Check healthcare.gov before you check a broker's quote page — the subsidy math often surprises people.
One more thing worth knowing: these plans don't count as minimum essential coverage, so if you're uninsured for part of the year, you're not penalized federally anymore, but you may still owe state penalties in places like California, Massachusetts, New Jersey, Rhode Island, and D.C.
The honest take: short-term health insurance is a gamble that nothing expensive happens during the exact window you hold it.
Final Thoughts
The companies selling it are betting it usually does — and they've priced the odds in their favor.