Laura Bennett thought she was doing the responsible thing.
When the 41-year-old dental hygienist left her job in Phoenix last spring, she priced out a marketplace plan at roughly $610 a month and balked.
Then a website offered her something called a "short-term" plan for $198.
She signed up for her family of three in about nine minutes.
Nine months later, the Bennetts got the real bill.
When Laura's husband Dave needed emergency gallbladder surgery, their insurer paid a small share and denied the rest, citing a pre-existing condition clause tied to a single past doctor's note about stomach pain.
The hospital bills totaled just over $84,000.
The family is now on a payment plan paying $1,400 a month.
This is how short-term health insurance works, and it's quietly becoming a bigger part of the American insurance market.
They don't have to cover the ten essential health benefits that Affordable Care Act plans must include, so maternity care, mental health treatment, prescription drugs, and preventive care are often excluded or capped.
They can also reject you or charge more based on your medical history, and they can dig through your records to deny a claim based on something you mentioned to a doctor years ago.
The policies are marketed under names like "temporary," "flexible," or "gap" coverage, which makes them sound like a bridge rather than a whole different product.
A Biden-era rule that would have capped these plans at three months of coverage was struck down in federal court in 2025, so the plans are back to offering terms up to 364 days, with renewals that can stretch coverage for years in some states.
Regulators in several states, including California and New York, restrict or ban them outright.
In states like Texas, Florida, and Arizona, they're widely available and heavily advertised.
If you're shopping, four things are worth checking before you type in a credit card number.
First, ask whether the plan covers prescriptions, because a single name-brand drug can cost more than a year of premiums.
Second, look for the words "not qualified health coverage" or "does not meet ACA requirements" — that's the tell.
Third, check the out-of-pocket maximum; many of these plans cap what they'll pay in a year, which is not the same as capping what you owe.
Fourth, price the same scenario on HealthCare.gov, where subsidies often shrink the real gap between a short-term plan and a real one.
A 2024 KFF survey found that six in ten adults with short-term plans had household incomes under $60,000.
They're people doing the math and getting the wrong answer anyway.
If you're between jobs or waiting on Medicare, a marketplace plan, a COBRA offer, or a state Medicaid program will almost always offer more protection than a short-term policy, even if the monthly number stings.
Call your state's insurance department — they'll tell you what's actually legal and regulated where you live.
The Bennetts' story isn't unusual; it's the entire design.
Cheap premiums are not a discount, they're a bet that you won't get sick.
Final Thoughts
The problem is that everyone eventually loses that bet, and by then the paperwork is already signed.