If you've peeked at ACA marketplace prices lately and felt your stomach drop, you've probably seen the ads.
Short-term health insurance plans promise coverage for a fraction of the cost—sometimes $100 a month or less.
For anyone between jobs, freelancing, or staring down a $700 monthly premium, that pitch is hard to scroll past.
Short-term plans aren't required to cover the ten essential health benefits that marketplace plans must include.
That means no guaranteed coverage for prescription drugs, maternity care, mental health treatment, or preventive care.
Some plans won't pay for anything related to a pre-existing condition—and they can define that term broadly enough to include a past knee injury or a previous round of antibiotics.
These plans can deny you outright based on your health history, charge you more because of it, or rescind your policy after you get sick if they find an error on your application.
They also cap how much they'll pay out—annual limits of $250,000 or $1 million sound generous until a single hospital stay blows past it.
And there's no cap on your out-of-pocket costs, which is the opposite of how ACA plans work.
People in genuine coverage gaps: a healthy 26-year-old waiting out an employer's 90-day probation period, someone between school and a job, a traveler needing a few months of catastrophic backup.
If you're generally healthy, need a bridge, and understand you're buying a discount card rather than real insurance, it can pencil out.
The problem is that most buyers don't read the exclusions until they're in an emergency room.
A 2023 KFF analysis found that short-term plans often exclude or limit coverage for conditions like cancer, diabetes, and even pregnancy—things that are common enough to matter.
Complaints to state insurance regulators about these plans have climbed as enrollment has grown.
If you're considering one, do three things first.
Check your state's rules, since some states ban or heavily restrict short-term plans.
Get the actual policy document, not the brochure, and search for the words "exclusion," "limitation," and "pre-existing." Then compare the total worst-case cost—premiums plus the maximum the plan will pay—against a marketplace plan with subsidies.
Many people qualify for tax credits that shrink that "expensive" ACA premium more than they expect.
One more option worth a look: a marketplace catastrophic plan, available to people under 30 or those with a hardship exemption.
It covers essential benefits and caps out-of-pocket costs, even though the deductible is high.
For a healthy person bridging a gap, it's often the smarter buy.
The bottom line is that cheap health coverage isn't the same as good health coverage, and the gap between those two things is where people get hurt.
Short-term plans work as a stopgap for the young and healthy, not as a substitute for real insurance.
Final Thoughts
Read the exclusions before you hand over a card—because the moment you need the plan most is the moment it's least likely to show up.