Short-Term Health Insurance: What It Covers, What It Doesn't, and Who It's For

Introduction

Life does not always line up with open enrollment periods. You might leave a job in March, graduate from college in May, or age off your parents' plan in the middle of summer. During these transitions, the gap between one health plan and the next can feel uncomfortably exposed -- one emergency room visit or unexpected diagnosis could result in thousands of dollars in medical bills.

Short-term health insurance exists precisely for these moments. It is temporary coverage designed to bridge gaps when you are between major medical plans. The premiums are significantly lower than ACA marketplace plans, and you can often get coverage within 24 hours. But that affordability comes with serious trade-offs: short-term plans do not cover pre-existing conditions, they can exclude entire categories of care, and they are not considered minimum essential coverage under the Affordable Care Act.

This guide breaks down everything you need to know about short-term health insurance in 2026 -- what it covers, what it leaves out, how much it costs, and who should or should not buy it.

What Is Short-Term Health Insurance?

Short-term health insurance -- sometimes called short-term limited duration insurance (STLDI) -- is a type of individual health coverage that provides temporary protection against unexpected medical costs. Unlike ACA-compliant plans, short-term policies are designed for people who need coverage for a defined, limited period rather than year-round.

These plans are sold by private insurers and regulated primarily at the state level. Under current federal rules, a short-term plan can last up to 364 days, with total coverage including renewals extending up to 36 months. However, many states impose stricter limits, and some ban short-term plans altogether.

Short-term plans use medical underwriting, meaning the insurer reviews your health history before offering coverage. This is the opposite of ACA marketplace plans, which must accept all applicants regardless of health status. Because short-term insurers can reject applicants or exclude conditions, their risk pool is healthier, which keeps premiums low.

How Short-Term Plans Differ from ACA-Compliant Plans

The differences between short-term and ACA marketplace plans are fundamental, not minor. Understanding these distinctions is critical before signing up.

Essential health benefits. ACA plans must cover ten categories of essential health benefits including hospitalization, prescriptions, maternity, mental health, and preventive care. Short-term plans have no such requirement and most exclude several categories entirely.

Pre-existing conditions. ACA plans must accept all applicants regardless of health status. Short-term plans use medical underwriting and routinely exclude pre-existing conditions -- diabetes, asthma, heart disease, depression, and any other chronic condition.

Annual and lifetime limits. ACA plans cannot impose dollar limits on essential benefits. Short-term plans can and do, often capping payouts at $250,000 to $1 million. A serious accident or extended hospital stay can exceed these limits.

Premium subsidies. ACA marketplace plans are eligible for premium tax credits that can dramatically reduce monthly costs. Short-term plans are never eligible for subsidies. Always check HealthCare.gov before assuming a short-term plan is cheaper -- a subsidized ACA plan may cost less.

Preventive care. ACA plans must cover preventive services at no out-of-pocket cost. Short-term plans have no such obligation, and most do not cover preventive care at all.

What Short-Term Plans Typically Cover

Despite their limitations, short-term plans provide meaningful coverage for common medical situations. Most policies cover:

• Emergency room visits. Coverage for medical emergencies like broken bones, severe allergic reactions, and chest pain after you meet the deductible. This is the core value of short-term insurance -- catastrophic protection.
• Inpatient hospitalization. Hospital stays for new conditions, including room and board, nursing care, and operating room charges, subject to the plan's deductible and benefit caps.
• Surgery. Both inpatient and outpatient surgical procedures for newly diagnosed conditions are typically covered.
• Doctor office visits. Many plans cover primary care and specialist visits for new illnesses or injuries, though some require meeting the deductible first.
• Diagnostic testing. Lab work, X-rays, MRIs, and other diagnostics ordered by a doctor for a new, covered condition.
• Urgent care. Visits to urgent care clinics for issues needing prompt attention -- high fevers, deep cuts, suspected infections -- are usually covered.

What Short-Term Plans Do NOT Cover

The exclusions on short-term plans are not edge cases -- they affect millions of Americans who rely on these types of care daily.

• Pre-existing conditions. Any condition that existed before the policy's effective date is excluded. This includes diabetes, heart disease, asthma, cancer, arthritis, depression, anxiety, and virtually any chronic condition. Lookback periods range from 12 months to your entire medical history.
• Maternity and pregnancy care. Prenatal visits, labor and delivery, postnatal care, and pregnancy complications are not covered. With childbirth costs averaging $15,000 to $30,000, this exclusion alone rules out short-term plans for anyone who is or may become pregnant.
• Mental health and substance use treatment. Therapy, psychiatric visits, inpatient mental health care, and substance abuse rehabilitation are almost never covered. ACA mental health parity rules do not apply.
• Preventive care. Annual physicals, immunizations, cancer screenings, and well-child visits are not covered. You pay full price out of pocket.
• Prescription drugs. Most short-term plans exclude prescriptions entirely or offer extremely limited benefits. Daily medications for blood pressure, thyroid, mental health, or birth control will cost you full retail price.
• Rehabilitation services. Physical therapy, occupational therapy, and speech therapy are often excluded or severely limited.

Duration and Renewability

Under federal rules, short-term plans can have an initial term of up to 364 days, with total duration including renewals of up to 36 months. These federal limits set the ceiling, but individual states can impose shorter limits.

Renewal terms vary by insurer. Some offer guaranteed renewability without a new health questionnaire, while others require a brand-new application with fresh underwriting. The critical detail: any condition that developed during your previous coverage period can be classified as pre-existing and excluded from the new policy. For example, if you are diagnosed with a thyroid condition during a six-month short-term plan, that condition will be excluded when you renew. This renewal reset is one of the most important differences from ACA plans, where continuous enrollment protects you.

State Restrictions

Short-term insurance regulation varies dramatically by state.

States that ban short-term plans. Approximately 15 states and the District of Columbia either prohibit short-term health insurance or have imposed regulations so restrictive that insurers have exited the market. These include California, Colorado, Connecticut, Hawaii, Maine, Maryland, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New Mexico, New York, Rhode Island, Vermont, and Washington.

States with duration limits. Several states allow short-term plans but cap initial terms at three or six months, or limit total duration to less than 36 months. These limits ensure short-term insurance functions as a temporary bridge rather than a long-term substitute.

Disclosure requirements. Federal rules require all short-term plans to include a prominent notice stating the coverage does not meet ACA requirements. Many states add their own mandates, such as side-by-side comparisons with ACA plans or specific warnings about coverage gaps.

Check your state's insurance department website before purchasing to confirm availability and any special rules.

Cost Comparison: Short-Term vs. ACA Marketplace Plans

The most obvious appeal of short-term insurance is cost. Premiums are typically 50 to 80 percent lower than ACA marketplace plans.

Why premiums are lower. Short-term insurers can deny applicants with health conditions, exclude pre-existing conditions, skip expensive benefit categories, and impose payout caps. They cover healthier people for fewer benefits, which keeps costs down.

Typical premiums. A healthy 30-year-old might pay $75 to $180 per month for a short-term plan with a $2,500 deductible. A Bronze-tier ACA plan for the same person -- before subsidies -- might run $300 to $500 per month.

Check your subsidies first. This is the step many people skip. Enhanced premium tax credits mean your after-subsidy cost for a comprehensive ACA Silver plan could be as low as $0 to $50 per month depending on income. At that price, a short-term plan makes no financial sense. Always check HealthCare.gov before deciding.

Also consider out-of-pocket risk. Short-term deductibles range from $1,000 to $10,000, and benefit caps mean your total exposure in a catastrophic event could far exceed an ACA plan's out-of-pocket maximum of $9,200 for individuals in 2026.

Who Should Consider Short-Term Health Insurance

Short-term insurance works best in specific transitional situations:

• Between jobs. If your new employer's benefits do not start for 60 or 90 days, a short-term plan covers the gap without the high cost of COBRA.
• Missed open enrollment. If you did not enroll in an ACA plan and lack a qualifying life event for a special enrollment period, short-term coverage bridges the gap until the next enrollment window.
• Young and healthy. If you have no pre-existing conditions and take no medications, the exclusions may not affect you. You are essentially buying catastrophic protection at a fraction of ACA plan costs.
• Aging off a parent's plan. If you turn 26 outside of open enrollment, a short-term plan can bridge the gap until you can enroll in your own ACA or employer plan.
• Recent graduates. If you have finished school and are no longer on a student health plan, a short-term policy provides low-cost coverage while you search for a job with benefits.

Who Should NOT Buy Short-Term Health Insurance

Short-term insurance is the wrong choice for many people. An ACA marketplace plan, Medicaid, or employer coverage will serve you far better if:

• You have pre-existing conditions. A short-term plan will exclude coverage for the care you need most -- any chronic condition means you are paying for a plan that will not pay for you.
• You are pregnant or planning a pregnancy. Short-term plans do not cover maternity care. You need an ACA plan that includes maternity and newborn care as an essential health benefit.
• You take regular prescriptions. Paying retail for daily medications can quickly eat into any premium savings from a short-term plan.
• You need mental health care. Therapy, psychiatric care, and substance abuse treatment are excluded. You need ACA-compliant coverage with mental health parity protections.
• You qualify for ACA subsidies. Enhanced subsidies have made marketplace coverage remarkably affordable -- often cheaper than short-term insurance with vastly superior benefits.

How to Apply for Short-Term Health Insurance

Applying for short-term insurance is faster and simpler than enrolling in an ACA plan. Follow these steps:

1. Check your state's rules. Confirm short-term insurance is available in your state and review any duration limits or special regulations.
2. Check ACA marketplace subsidies. Visit HealthCare.gov to see if you qualify for premium tax credits that could make an ACA plan cheaper.
3. Compare plans from multiple insurers. Benefits, exclusions, deductibles, and premiums vary significantly between carriers. Use a broker or online marketplace to compare.
4. Complete the health questionnaire. Answer honestly -- if you omit or misrepresent information, the insurer can deny claims or rescind your policy.
5. Review the full policy document. Read the complete policy, not just the summary. Focus on exclusions, benefit caps, deductible, coinsurance, and any waiting periods.
6. Enroll and note your coverage dates. Coverage can begin as soon as the next day. Record your start date, end date, and renewal deadlines, and set a reminder to enroll in an ACA plan during the next open enrollment.

Key Consumer Protections and Disclosures

Because short-term plans operate outside the ACA framework, regulators have put several safeguards in place:

• Mandatory disclosure notice. Every short-term policy must include a prominent written notice that it is not minimum essential coverage, does not comply with ACA requirements, and does not cover pre-existing conditions.
• Free-look period. Many states require a free-look period of 10 to 30 days during which you can cancel for a full refund.
• Claims appeal rights. You can typically file an internal appeal if a claim is denied, though short-term plans are not subject to ACA external review requirements.
• State insurance department oversight. You can file a complaint with your state insurance department if your insurer acts unfairly. The NAIC maintains a directory of state contacts.

One protection you should not count on: the ACA's prohibition on rescission. Some short-term insurers have broader rescission rights, meaning an omission on your questionnaire -- even unintentional -- could lead to retroactive policy cancellation. Accuracy on your application is essential.

The Bottom Line

Short-term health insurance serves a real purpose: affordable, temporary coverage for healthy people in transitional situations. If you are between jobs, waiting for benefits to start, or bridging a gap between enrollment periods, a short-term plan can protect you against catastrophic costs at a price that is hard to match.

But it is not comprehensive insurance. The exclusions for pre-existing conditions, maternity, mental health, prescriptions, and preventive services are fundamental to how short-term plans keep premiums low. If you need coverage in any of these areas, a short-term plan will leave you exposed when you need protection most.

Before purchasing, take three steps. First, check whether your state allows short-term insurance. Second, visit HealthCare.gov to see if you qualify for subsidized ACA coverage -- you may find a comprehensive plan costs less than you expect. Third, read the policy documents thoroughly, paying close attention to exclusions, benefit caps, and renewal terms.

Short-term health insurance is a tool -- useful in the right circumstances, but a poor substitute for comprehensive coverage. Choose it for the right reasons, with a full understanding of what it will and will not do for you.