What short-term plans actually are
Short-term, limited-duration insurance (STLDI) is a type of health coverage designed to fill temporary gaps. It is not ACA-compliant. That distinction matters because it means short-term plans are exempt from most ACA consumer protections: they can deny coverage for pre-existing conditions, set annual or lifetime benefit limits, exclude entire categories of care, and charge higher premiums based on health status.
These plans are typically sold by private insurers outside of HealthCare.gov. They do not qualify for premium tax credits or cost-sharing reductions. Enrolling in a short-term plan does not count as qualifying health coverage under the ACA (though the federal individual mandate penalty is currently $0, so that distinction is mostly symbolic at this point).
What they cover (and what they skip)
A typical short-term plan covers:
- Doctor visits and urgent care
- Emergency room visits
- Hospitalization
- Some diagnostic tests and lab work
A typical short-term plan does not cover:
- Pre-existing conditions. Any condition you had before the plan start date is excluded. This includes common things like diabetes, asthma, high blood pressure, depression, and previous injuries. Insurers review your medical history and can deny claims retroactively if they find an undisclosed condition.
- Prescription drugs. Many short-term plans exclude prescription coverage entirely or offer very limited formularies.
- Maternity care. Pregnancy and childbirth are almost never covered.
- Mental health and substance abuse treatment. These are ACA essential health benefits, but short-term plans are not required to include them.
- Preventive care at no cost. ACA plans must cover preventive services like annual physicals, vaccines, and screenings with no copay. Short-term plans may charge for these or not cover them at all.
The deductibles on short-term plans can also be surprisingly high. Plans with the lowest monthly premiums often have deductibles in the $5,000 to $10,000 range, and out-of-pocket maximums can reach $20,000 or more. Unlike ACA plans, there is no federal cap on how much you can owe.
The cost comparison
Short-term plans typically cost $100 to $250 per month for an individual, depending on age, location, and deductible level. That is significantly less than the average unsubsidized ACA Silver plan, which runs about $687 to $752 per month for a 40-year-old in 2026.
But that comparison is misleading for two reasons:
- Subsidies change the math. A 35-year-old earning $40,000 might pay $200/month or less for a marketplace Silver plan after tax credits. That could be the same price as a short-term plan but with vastly better coverage, including pre-existing condition protections and prescription benefits.
- Coverage gaps mean financial exposure. A short-term plan with a $10,000 deductible and no prescription coverage is not comparable to a marketplace plan with a $3,000 deductible that covers drugs, mental health, and maternity. The monthly premium is lower, but your worst-case scenario is much worse.
Duration rules (and why they keep changing)
Federal rules on short-term plan duration have gone back and forth depending on the administration. In 2024, the Biden administration finalized a rule limiting short-term plans to an initial term of three months, with total duration including renewals capped at four months.
In August 2025, federal agencies announced they were re-examining those rules and pausing strict enforcement. As of early 2026, many states now allow short-term plans with terms of up to 12 months, and some states allow renewals for up to 36 months total.
State rules vary widely and take precedence over federal rules when they're stricter. This means the plan you can buy depends heavily on where you live.
States that ban or restrict short-term plans
About 20 states plus the District of Columbia have either banned short-term plans entirely or imposed strict limits that make them effectively unavailable:
- States with outright bans: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Pennsylvania, Rhode Island, Vermont, Washington, and D.C.
- States with strict duration limits: Several other states cap plans at 3 or 6 months with no renewal option.
- States with longer allowances: Florida, Georgia, Indiana, Missouri, Ohio, and others allow terms of up to 12 months with renewals totaling 36 months.
If you live in a state that has banned short-term plans, your alternative is an ACA marketplace plan. If you're between coverage and outside of Open Enrollment, check whether you qualify for a Special Enrollment Period based on a life event.
Who short-term insurance is actually good for
There is a narrow set of circumstances where a short-term plan makes sense:
- You are young and healthy with no pre-existing conditions, and you are in a genuine, temporary gap between coverage. For example, you graduated college in June, your parent's plan coverage ends, and your new job with benefits starts in September.
- You don't qualify for marketplace subsidies, your income is too high for meaningful premium assistance, and you just need something for a few months while transitioning between jobs or waiting for employer coverage to start.
- You missed Open Enrollment and don't have a qualifying event for a Special Enrollment Period, so the marketplace is not currently available to you. A short-term plan for a few months until the next Open Enrollment might be better than nothing.
Even in these cases, you should compare the short-term plan's cost against the cost of going uninsured for a few months. If you are genuinely healthy and the gap is short, the financial risk of being uninsured for 60 to 90 days may be comparable to the risk of having a short-term plan with a $10,000 deductible and pre-existing condition exclusions.
The risks
The biggest risk with short-term insurance is that people buy it thinking they have real coverage, then discover they don't when they need it. Common scenarios:
- You have a condition you did not realize was "pre-existing" (like back pain from years ago), and the insurer denies your claim after reviewing your medical records.
- You need a prescription that is not on the plan's limited formulary, or the plan has no drug coverage at all.
- You become pregnant while on a short-term plan and discover maternity care is excluded.
- You develop a serious condition while covered, but the plan reaches its benefit maximum (which ACA plans cannot have) and stops paying.
Short-term plans can also make it harder to switch to ACA coverage. Buying a short-term plan does not trigger a Special Enrollment Period. If you miss Open Enrollment, you may be stuck on the short-term plan until the next enrollment window, with all its limitations.
The bottom line
Short-term health insurance exists for a reason: to bridge genuine, temporary gaps when no other coverage is available. For a healthy person between jobs who just needs something for two or three months, it can work.
For everyone else, an ACA marketplace plan is almost always the better choice. Marketplace plans cover pre-existing conditions, include essential benefits, have capped out-of-pocket costs, and can be significantly discounted with subsidies. If you are worried about marketplace premiums, check your subsidy eligibility first. Many people are surprised by how much help they qualify for.