Short-Term Health Insurance: Pros, Cons, and Providers

Picture Maya, 34, a graphic designer. Her last day at an agency is at the end of September, and her new job starts in January, with health insurance from the first day. That leaves three months. COBRA would cost her more than $700 a month. A short-term health plan she finds online costs $140. The marketplace Bronze plan she qualifies for costs $230 after her subsidy.

Maya is invented, but her choice is common, and in 2026 it is more common than it has been for years. Marketplace premiums rose after the enhanced subsidies ended, and in 2025 federal regulators stopped enforcing the four-month limit on short-term plans. So which should she pick? The honest answer is that it depends on what happens in those three months, which is exactly what she cannot know.

What Maya would actually be buying

A short-term plan is health insurance that does not have to follow the Affordable Care Act. That is why it is cheaper. It can ask about your health and turn you down. It can refuse to pay for any condition you had before it started, and it decides what counts as preexisting. It can leave out whole categories of care, and it can cap what it pays over the life of the policy.

KFF’s review of short-term products found that only about half cover prescription drugs, fewer than half cover mental health and substance use treatment, and virtually none cover maternity care. Some plans exclude sports injuries or will not pay for a hospital stay that begins on a Friday or Saturday. None of this is hidden, exactly; it is in the policy documents most people never read.

The Bronze plan costs more each month but covers the ACA’s essential health benefits, cannot exclude preexisting conditions and has a legal limit on what Maya can pay in a year: $10,600 in 2026 for covered in-network care. Its deductible is high, so for small problems she would pay most of the bill herself. Its real value is in the large ones.

Maya ran both through the simulator below. You can change the numbers to match the quotes you have.

Three months, two plans: what if something happens?

Pick an event. Costs for each plan are worked out over a three-month gap.

Short-term plan

Monthly premium ($) Deductible ($) Coinsurance after deductible (%) Most the plan will pay ($)

Marketplace Bronze (ACA)

Monthly premium after subsidy ($) Deductible ($) Coinsurance after deductible (%) Out-of-pocket maximum ($)

Event costs are illustrative round numbers, not quotes. Short-term plans differ widely: read the exclusions in the actual policy. This is a teaching tool, not insurance advice.

What the simulator shows

If nothing happens, the short-term plan wins, by a few hundred dollars over three months. With a minor accident, such as the broken wrist, the two come out close, depending on the deductibles. The difference opens up with anything serious or ongoing.

Appendicitis, a classic event for a healthy 34-year-old, can produce a bill in the tens of thousands. A short-term plan with a 30% coinsurance and no out-of-pocket cap leaves a large share of that with Maya; the Bronze plan stops at its maximum. A cancer diagnosis is worse in a way the numbers do not fully show. Treatment would continue long after the short-term plan ends, and a new short-term insurer could refuse the condition as preexisting. Only ACA coverage guarantees she could keep being treated.

The diabetes and therapy scenarios show a different problem. The short-term plan simply does not pay, because the condition existed before the policy started or the service is excluded. With the Bronze plan, even a bill below the deductible at least counts toward the yearly maximum.

The rules, as of late 2026

In 2024, federal rules limited new short-term plans to three months, with a maximum of four months including renewals. In September 2025, the Departments of Labor, Health and Human Services and the Treasury said they would not prioritize enforcing that limit, and insurers again began offering longer policies, in some states up to 36 months. The agencies have said they plan to propose a new rule, so check the current status before you buy.

States can go further, and many do. According to healthinsurance.org, short-term plans are not available in 14 states and Washington, DC, either because state law bans them, as in California, New Jersey and New York, or because no insurer offers them under state rules. Several other states, including Delaware, Maryland and Oregon, limit them to three months. Your state insurance department can tell you what applies where you live.

When a short-term plan can make sense

There are situations where it is a reasonable bet. You are healthy, take no regular medication and have no ongoing conditions. The gap is short and has a defined end, such as a job with coverage that starts on a known date. You missed the marketplace’s special enrollment window, so ACA coverage is not available until January anyway. And you have enough savings to absorb a deductible and coinsurance if you are unlucky.

It is a poor bet if any of those is missing, and especially if you are pregnant or planning to be, take prescription drugs, see a therapist or have had a serious illness. In those cases the exclusions are not a risk, they are a certainty. If you qualify for marketplace coverage, check the subsidy first: our guide to health insurance without an employer walks through the options, including Medicaid and catastrophic plans, and the self-employed guide explains the subsidy cliff.

If you do buy one

Read the policy, not the brochure. Find the definition of a preexisting condition and the look-back period. Check the maximum benefit, whether prescriptions are covered and whether there is a separate deductible for each illness. Confirm the network, since some plans pay little outside it. Check the insurer in the NAIC Consumer Insurance Search, and be wary of sales calls that describe a short-term plan or a discount card as “full coverage.” It is not.

What Maya chose

Maya took the Bronze plan. The short-term plan would probably have saved her about $270, and probably is the important word. She had used her 60-day special enrollment window, so she could get ACA coverage that started the next month, and she decided that $90 a month was a fair price for knowing that a bad diagnosis in November would not follow her into a new job and a new insurer. Someone with a firmer start date, no time left to enroll in the marketplace and more savings might reasonably choose the other way.

Last reviewed October 2026 by the SmartCoverage Editorial Team. How we research. Maya is a hypothetical example. This article explains how these plans generally work and is not personal insurance advice; rules and plan terms vary by state and insurer.

Short-Term Health Insurance: Pros, Cons, and Best Providers