You just left your job and your COBRA letter arrived. The monthly premium? Nearly $700. Your new job starts in three months, but you need something to cover you in the meantime. Enter short-term health insurance—the coverage option that promises affordable protection when you're between plans. But here's what most people don't realize until it's too late: short-term insurance isn't just cheaper because it covers less time. It's cheaper because it covers a lot less, period.
In 2026, short-term health insurance occupies a complicated space in the insurance landscape. Federal regulations have flip-flopped, state rules vary wildly, and the future of ACA subsidies remains uncertain. If you're considering short-term coverage, you need to understand exactly what you're getting—and what you're giving up.
What Is Short-Term Health Insurance?
Short-term health insurance—sometimes called short-term limited duration insurance or STLDI—is designed to fill temporary gaps in coverage. Think of it as the insurance equivalent of a band-aid: it'll get you through a rough patch, but it's not meant to be permanent.
These plans aren't subject to the Affordable Care Act's requirements, which is why insurers can offer them for so much less than marketplace plans. In 2026, the regulatory landscape remains in flux. Federal rules implemented in 2024 tried to cap plans at three months initially with a maximum of four months total including renewals. But in August 2025, federal agencies paused enforcement of these stricter rules, allowing states more flexibility. Now, depending on where you live, you might be able to get coverage for anywhere from three months to three full years.
In states like Florida, Indiana, Missouri, Georgia, and Ohio, you can still find 36-month plans. Kansas, Wisconsin, and South Dakota allow 12-month coverage. But in 12 states—including California, New York, Massachusetts, New Jersey, Vermont, and Washington—short-term plans are either banned outright or effectively unavailable due to strict state regulations.
The Cost Advantage (and Why It Exists)
Here's the appeal: short-term health insurance typically costs 50-80% less than comparable ACA marketplace plans. While the average ACA plan premium in 2024 was around $540 per month, short-term plans can run as low as $100-$200 monthly for a healthy individual.
But there's a reason for that price difference. Short-term plans achieve lower premiums by excluding the people most likely to need care. They require medical questionnaires before approval, can deny coverage based on your health history, and won't cover anything related to pre-existing conditions. That chronic back pain from an old sports injury? Not covered. The diabetes you manage with medication? Not covered. And here's the kicker: some plans can deny claims for conditions you didn't even know you had before signing up.
These plans also come with much higher deductibles. While ACA bronze plans have deductibles ranging up to $9,200, short-term plan deductibles can reach $25,000. And unlike ACA plans, short-term insurance can impose annual and lifetime benefit caps, meaning your coverage could max out precisely when you need it most.
What Short-Term Plans Don't Cover
ACA marketplace plans must cover ten essential health benefits, including maternity care, mental health services, prescription drugs, and preventive care. Short-term plans? Not so much. The vast majority don't cover maternity care at all. Some don't include prescription drug coverage. Mental health and substance abuse treatment are often excluded or severely limited.
Pre-existing condition exclusions are where these plans get particularly tricky. Insurers look back anywhere from six months to five years in your medical history, depending on your state. If you saw a doctor for anything during that look-back period—even if you didn't get a diagnosis—the insurer could potentially deny claims related to that condition. Got a prescription for acid reflux two years ago and now need treatment for a stomach ulcer? That claim might be denied as related to a pre-existing condition.
The 2024 federal regulations did require enhanced disclosures, so insurers must clearly warn you about these exclusions and limitations. Read those warnings. They're there for a reason.
When Short-Term Insurance Makes Sense
Despite all these limitations, short-term health insurance does have legitimate uses. If you're young, healthy, have no pre-existing conditions, and need coverage for a specific, brief period, it can work. Common scenarios include:
You're between jobs and your new employer's coverage kicks in after 90 days. You missed the ACA open enrollment period and need something to get you through to the next one. You're aging off your parents' plan but won't have employer coverage for a few months. You're waiting for Medicare eligibility and need a short bridge.
The key word in all these scenarios is "short." These plans aren't designed for long-term coverage, and using them that way puts you at serious financial risk. If you develop a chronic condition while on a short-term plan and then try to switch to more comprehensive coverage, you'll have a pre-existing condition that any future short-term plan can exclude. Only an ACA marketplace plan or employer coverage will protect you from pre-existing condition exclusions.
Consider Your Alternatives First
Before jumping into a short-term plan, explore other options. You might qualify for a Special Enrollment Period on the ACA marketplace if you've lost coverage due to job loss, marriage, or moving. In 2024 and 2025, four out of five consumers found marketplace plans for $10 or less per month thanks to enhanced subsidies.
However, 2026 brings uncertainty. Those enhanced premium tax credits are set to expire, which could more than double what subsidized enrollees pay—from an average of $888 annually to $1,904. If that happens, short-term plans might look even more attractive to budget-conscious consumers. But even then, COBRA, Medicaid (if you qualify), or a catastrophic ACA plan might offer better protection for only slightly more money.
How to Get Started
If you decide short-term insurance is right for your situation, start by checking your state's rules. Visit your state insurance department's website to understand duration limits and regulatory requirements. Compare multiple plans, reading the fine print on pre-existing condition exclusions, coverage caps, and what services are actually included.
Calculate your total potential costs, including premiums, deductibles, and out-of-pocket maximums. Then compare those numbers to what you'd pay for an ACA marketplace plan—you might be surprised to find the difference isn't as dramatic as you expected, especially when you factor in better coverage.
Short-term health insurance in 2026 remains what it's always been: a stopgap measure, not a solution. For the right person in the right circumstances, it can provide affordable protection during a genuine coverage gap. But go in with your eyes open, understand exactly what you're buying, and have a plan for transitioning to comprehensive coverage as soon as possible. Your future health—and your bank account—will thank you.
