Short-term health insurance is the product people find when they search “cheap health insurance” and get sticker shock from ACA premiums. The monthly prices look great, often a third of an unsubsidized Marketplace plan.
Those prices are real, but they are cheap for a reason. This guide explains what short-term plans actually cover, the current federal duration rules (which changed in 2024 and changed again in practice in 2025), what you’ll pay, and the underwriting gotchas that surprise people at claim time.
What Is Short-Term Health Insurance
Short-term limited-duration insurance (STLDI) is temporary medical coverage that is exempt from ACA rules. Because it is not ACA-compliant, insurers can do things Marketplace plans cannot:
- Decline your application or charge more based on health history
- Exclude pre-existing conditions entirely
- Skip essential health benefits. healthinsurance.org notes the most commonly excluded services are maternity care, mental health care, preventive care, and prescription drugs.
- Impose annual and lifetime dollar caps on benefits
What you get in exchange is a low premium and fast enrollment (often next-day coverage, any time of year, with no open enrollment window). Its traditional job, per CMS, is serving as temporary coverage during a gap, not as a long-term alternative to comprehensive insurance.
The Duration Rules: What’s Actually in Effect Right Now
This is where short-term insurance got complicated, so here is the timeline.
The 2018 rule (the old baseline). Federal rules allowed an initial term of 364 days, with renewals keeping a policy in force up to 36 months, per healthinsurance.org.
The 2024 rule (still on the books). A federal rule finalized in 2024 rewrote the definition of STLDI. For plans sold on or after September 1, 2024, CMS’s fact sheet states the initial contract term is limited to no more than 3 months and the maximum coverage period to no more than 4 months, counting renewals and extensions. The rule also banned “stacking” (buying sequential policies from the same or affiliated insurer within 12 months to dodge the limit) and required a prominent consumer notice explaining that the plan is not comprehensive coverage.
The 2025-2026 reality. According to healthinsurance.org, the Trump administration announced in August 2025 that the federal government was no longer prioritizing enforcement of the 4-month rule, and plans with 36-month durations have once again become available for purchase in many states. New federal rulemaking on STLDI is pending, so these rules may formally change again. Until then, the 4-month rule is technically federal law but is not being enforced.
Your state is the real referee. States can be stricter than the federal floor, and many are. healthinsurance.org counts 15 states (including DC) where no short-term plans are available at all: California, Colorado, Connecticut, DC, Hawaii, Illinois, Maine, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Rhode Island, Vermont, and Washington. Other states cap durations below whatever the federal rule allows.
Practical takeaway: the plan lengths you are offered depend on your state today, and could change when the pending federal rule lands. Read the term and renewal language on the actual policy, not a marketing page.
What It Costs
Short-term premiums are underwritten, so your age, location, and health answers drive the price. Here is what current published data shows:
| Cost item | Typical figure | Source |
|---|---|---|
| Monthly premium, low end | Under $100/month | healthinsurance.org |
| Monthly premium, common range | Under $150 to under $300/month (2026 Wyoming example) | healthinsurance.org |
| Deductible, lowest-premium plans | Around $10,000 (2026 example, age 45) | healthinsurance.org |
| Out-of-pocket maximum | Around $20,000 (same example) | healthinsurance.org |
Compare that with unsubsidized ACA coverage, which often runs several hundred dollars a month for a single adult, and you can see the appeal. But note what the table shows: the cheap premium usually rides along with a five-figure deductible and an out-of-pocket max that can be double what any ACA plan is allowed to have. And the benefit caps mean a truly catastrophic claim can blow through the policy’s maximum entirely.
If you do shop for a plan, compare more than the premium. Check the deductible, the coinsurance, the per-cause and policy-wide benefit maximums, whether prescription drugs are covered at all, and the list of excluded conditions and waiting periods. Two plans at the same $150 price point can behave completely differently at claim time.
The Gotchas
These are the traps that generate horror stories, and they are worth reading twice.
Pre-existing conditions are not covered. healthinsurance.org is blunt: you will generally not have coverage for any pre-existing medical conditions while enrolled. That includes conditions you did not know about yet.
Post-claims underwriting. The application may be just a handful of yes/no health questions, but insurers can use post-claims underwriting, going back through your medical records after you file a large claim to look for grounds to deny it as pre-existing.
No essential health benefits. Maternity, mental health, preventive care, and prescription drugs are the most commonly excluded categories. If it is not listed as covered, assume it is not.
Benefit caps. Because these plans are not ACA-regulated, they can carry annual and lifetime maximums. A $250,000 cap sounds large until you price an ICU stay.
No subsidy, and no protection if you get sick. Buying short-term coverage means giving up premium subsidies you might qualify for on the Marketplace. And if you develop a condition mid-policy, the insurer can decline to renew you, leaving you waiting for open enrollment. If a bill does land on you, our guides to negotiating medical bills and hospital charity care can help.
Who It’s Good For, and Who Should Skip It
Reasonable use cases:
- A gap of weeks or a couple of months between jobs, especially if you missed the Marketplace special enrollment window
- Waiting out a new employer’s benefits waiting period (often up to three months)
- Bridging to Medicare or to a January 1 Marketplace start date
- Healthy people who understand they are buying accident-and-emergency protection, not health care coverage
Skip it if:
- You lost job-based coverage recently. That triggers a 60-day Marketplace special enrollment period, and subsidies may make an ACA plan cheaper than the short-term plan. See our breakdown of COBRA costs and alternatives.
- You have any ongoing condition, take regular medications, or could be pregnant
- You are under 30 or exemption-eligible: a catastrophic Marketplace plan gives real ACA protection with a similar low-premium design
- You would be relying on it for more than a few months. For long-haul strategies without employer coverage, start with our uninsured start-here guide.
Short-Term vs. Traditional Insurance
| Feature | Short-term plan | ACA Marketplace plan |
|---|---|---|
| Can be declined for health history | Yes | No |
| Pre-existing conditions covered | Generally no | Yes |
| Essential health benefits | Not required, often excluded | All 10 required |
| Annual/lifetime benefit caps | Allowed | Prohibited |
| Premium subsidies | No | Yes, income-based |
| Enrollment | Any time, often next day | Open enrollment or special enrollment period |
| Typical premium (single adult) | Roughly $100-$300/month | Higher unsubsidized, often lower after subsidies |
| Out-of-pocket ceiling | Can exceed $20,000, plus benefit caps | Federally capped for all plans |
Bottom Line
Short-term health insurance is a real tool with a narrow job: covering a brief, defined gap for a healthy person who knows exactly what is excluded. Priced at $100 to $300 a month it can beat going bare, and the current non-enforcement of the federal 4-month limit means longer terms are available in many states again.
But it is not a cheap version of health insurance; it is a different product that pays claims only when your medical history and the policy’s exclusions allow it. Before buying, price a Marketplace plan with subsidies, check whether you qualify for a catastrophic plan, and consider alternatives like health sharing ministries and direct primary care only with the same skeptical reading of the fine print.