If you have ever priced health coverage between jobs, you have probably seen the ads: a plan for $89 a month, no network hassles, coverage that starts tomorrow.
These are short-term, limited-duration health plans, and they are having a moment.
Federal rules loosened under the last administration let insurers sell them for up to three years in many states, and they have become a default landing spot for people who lost a job, aged off a parent's plan, or missed open enrollment.
Here is the catch that trips people up in the emergency room.
These plans are not required to cover pre-existing conditions, and they can look back at your medical history to decide what counts.
A 2020 Kaiser Family Foundation review found that many short-term plans exclude coverage for things like maternity care, mental health treatment, prescription drugs, and even common surgeries.
One plan analyzed by researchers did not cover cancer treatment at all.
An ACA marketplace plan can run $400 to $600 a month for a mid-40s couple after subsidies, while a short-term plan for the same pair might quote $150 to $250.
Insurers hold down costs by denying claims tied to conditions you had before the policy started, capping how much they will pay out in a year, and screening applicants with health questions.
A single hospital stay can blow past a $250,000 annual cap faster than you would expect.
Complaints to state insurance departments about these plans tend to cluster around the same story: a policyholder gets a diagnosis, files a claim, and discovers the insurer is treating the condition as pre-existing or the service as excluded.
Some states, including California, New York, and Massachusetts, have effectively banned or sharply limited these plans, so what you can buy depends heavily on your ZIP code.
A healthy person with no chronic conditions, a short gap of a few weeks or months, and savings set aside to cover a worst-case scenario.
If you have diabetes, a past back surgery, or a prescription you refill monthly, the math usually falls apart.
The same goes if you are pregnant or planning to be.
Before you enroll, read the outline of coverage document, not the sales page.
Search it for the word "excluded." Call the insurer and ask directly whether your specific medications are covered and what the annual maximum is.
If you qualify for a marketplace subsidy, compare that net price against the short-term quote, because the gap is often smaller than the sticker suggests.
And check the plan's rating and complaint history with your state insurance department.
A cheap premium is not the same as cheap care.
Final Thoughts
Short-term plans can bridge a real gap for a healthy person with savings on hand, but they were never designed to be a long-term substitute for comprehensive coverage, and treating them that way is how people end up with a five-figure bill they thought was insured.