Short-term health insurance is having a moment.
With ACA marketplace premiums climbing and open enrollment drawing attention to how much coverage really costs, a growing number of Americans are typing "cheap health insurance" into search bars and landing on plans that promise monthly rates of $50, $80, maybe $120.
Those plans are real, and they are legal in most states.
They are also not what most people assume they are.
Short-term plans, sometimes marketed as "temporary" or "limited benefit" coverage, were designed to bridge gaps of a few months between jobs or moves.
Federal rules expanded them in 2018, letting insurers offer terms just under 12 months and renew them for up to 36 months in many states.
That longer runway turned a stopgap product into something that looks, to a shopper comparing prices, like a normal health plan.
Under federal law, short-term plans don't have to cover prescription drugs, maternity care, mental health treatment, or substance abuse services.
They can cap how much they pay out per year.
They can reject you for pre-existing conditions, and they can charge women more than men for the same policy.
The deductible is where it gets expensive.
Many plans pair a low-looking rate with deductibles in the $5,000 to $15,000 range, plus per-day hospital copays and separate limits on things like lab work or imaging.
A single emergency room visit can blow past what the plan will pay, leaving the rest on you.
If you get sick while covered, the insurer can decline to renew your policy when the term ends.
You then have to shop again, this time with a new diagnosis on your record, and you may find yourself priced out of the very market you started in.
None of this means short-term plans are illegal or useless.
For a healthy 28-year-old between jobs for 60 days, a short-term policy can be a reasonable way to avoid going completely bare.
These plans are frequently sold by phone, through lead-generation websites, and by brokers who earn commissions that can exceed what they'd make on an ACA plan.
If you're shopping, ask three questions before you enter a card number.
Does this plan cover prescriptions, and is there a separate drug deductible?
What is the out-of-pocket maximum, and does it apply to everything or only some services?
And what happens if I get diagnosed with something serious during the term?
If the answers are vague, that's your answer.
The bigger issue is that Americans are being asked to comparison-shop their way through a system where the cheap option and the safe option are often different products.
That's a policy failure dressed up as consumer choice.
Final Thoughts
Read the fine print, or pay someone who will read it for you.