Short-Term Health Insurance: 6 Things You Need to Know Before You Buy

Choosing a health insurance plan is a big decision, especially when you’re considering a short-term medical (STM) plan. These temporary options are typically more affordable and flexible than ACA plans, but they also come with different rules.

Whether you’re between jobs, waiting for open enrollment, or simply looking for gap coverage, it’s crucial to understand how STM plans work so you can make an informed decision.

In this guide, we’ll walk you through six must-know facts about short-term medical insurance and how it compares to traditional ACA-compliant plans.

What Is a Short-Term Medical Plan and Who Is It For?

Short-term medical insurance is designed to provide temporary coverage during gaps in traditional insurance.  However, there are short-term medical solutions available in the market that can bridge the gap to open enrollment and beyond. In addition, STM policies cover 8 out of 10 essential health benefits.

STM plans may be an option  if you:

• Are in between jobs or waiting for group coverage to begin
• Missed the Open Enrollment window
• Need temporary coverage before becoming eligible for Medicare
• Are you looking for a lower-cost, limited alternative to ACA insurance

Short-Term Medical (STM) plans are not one-size-fits-all — they’re flexible and can be tailored to meet your unique needs. However, while ACA plans are guaranteed-issued, your health history may be a factor for STM coverage. As a result, you will want to evaluate your options carefully before making a decision.

1. Short-Term Plans Have Lower Monthly Premiums—but May Have Coverage Limitations

One of the biggest appeals of STM plans is the cost. Monthly premiums are often far lower than those for ACA plans. But that lower cost comes with trade-offs:

• No guaranteed coverage for pre-existing conditions
• Limited benefits: May not include maternity, etc.
• Cap on benefits: Some plans include dollar limits on coverage
• Higher out-of-pocket exposure: Watch for high deductibles and coinsurance

Tip: Don’t just look at the monthly price—check what’s not covered, too. Also, if you’re considering STM plans, timely enrollment will have you covered for whatever comes your way tomorrow.

2. You May Not Be Eligible Based on Your Health History

Unlike ACA plans, STM coverage is not guaranteed. This means:

• Insurers can state you are not eligible based on medical conditions
• You may be asked to complete a health questionnaire
• Coverage for any pre-existing condition may be excluded

Important: Even if you’re approved, your coverage might not pay for treatment of conditions you’ve had before the policy start date.

3. STM Plans Don’t Qualify for ACA Subsidies

If you buy coverage through the Health Insurance Marketplace, you may qualify for ACA subsidies like:

• Premium tax credits
• Cost-sharing reductions

STM plans are sold outside the Marketplace and do not qualify for any federal financial assistance.

If you earn a moderate income, ACA plans with subsidies may offer broader protection at a similar or even lower net cost.

However, if you have an ACA plan, you could experience a significant increase in your monthly premium in 2026. Enhanced federal subsidies are set to expire at the end of 2025, leading to higher out-of-pocket costs across the board.

4. STM Plans Don’t Follow ACA Rules—or Cover All Essential Health Benefits

ACA-compliant plans must cover services like preventive care, maternity, mental health, and prescription drugs. STM plans are not required to include these benefits, but some plans do cover 8 out of 10 essential benefits like doctor visits, urgent care, first-dollar benefit for annual wellness visit, preventive benefits, and hospitalization. In addition, some plans utilize national networks or are considered open access plans with no network restrictions.

However, depending on the plan, you may find:

• No coverage for routine care, maternity, or mental health
• Limited or no prescription drug benefits
• No free preventive care (like vaccines or cancer screenings)
• No protections against annual or lifetime benefit limits

Checklist:

• Read the plan brochure carefully
• Look for exclusions in areas like mental health, substance use, and rehab
• Understand how benefits apply after the deductible

5. You Can Enroll Anytime—but Watch the Duration Limits

The special enrollment window for ACA plans could be eliminated, leaving fewer opportunities to secure ACA coverage if you need it. Unlike ACA plans, short-term coverage is available year-round and you can cancel at any time. 

However, there are limitations:

• Plans can start as soon as the next day
• Coverage can last from 30 days to several months (varies by state)
• Federal rules currently limit short-term medical (STM) plan durations to 3 months (with a 1-month extension). For some states, Pivot Health plans allow you to receive coverage for up to 12 months.

Tip: Confirm your state’s rules—some states don’t allow STM plans at all or restrict coverage to 4 or 8 months.

6. STM Plans Work Best for Specific Situations—Not Always for Long-Term Coverage

Short-term insurance can be a good fit if you:

• Need coverage while waiting for a new job’s benefits to kick in
• Are healthy and want financial protection from accidents, emergencies, and possibly some wellness and preventive coverage
• Can’t afford ACA plans and don’t qualify for subsidies
• Retire early and don’t yet qualify for Medicare
• You missed the open enrollment period
• You are self-employed or a gig worker
• You are looking for more flexibility in your health insurance plan, including your network. In some cases, you can have open access to any provider

But STM is not ideal if you:

• Have preexisting chronic health conditions or ongoing medical needs;
• Are planning a pregnancy and need maternity health coverage;
• Are looking for guaranteed issue coverage.

If any of these apply, a Marketplace ACA plan—even with a higher premium—may provide better long-term value.

Explore our guide on 6 situations when it makes sense to buy short-term health plans.

FAQs About Buying a Short-Term Plan

Q: Can I use a short-term plan as my primary coverage all year?
A: It depends on your situation.  If you reside in a state that offers up to 12 months of coverage, you will want to take advantage of that to avoid exposure to gaps in care or denied claims.

Q: Do STM plans cover vaccines?
A: It depends on the plan. Some plans may offer childhood immunizations.

Q: Can I renew my short-term plan?
A: It depends on state rules and your health status. Some insurers require reapplication, which may include another medical screening.

Take Action: Is a Short-Term Plan Right for You?

✅ Compare short-term medical options side-by-side
✅ Read the exclusions and benefit offerings carefully
✅ Check your state’s maximum duration rules
✅ Make a backup plan if you are not eligible for coverage or if your coverage expires
✅ Consider an ACA plan if you have preexisting conditions, qualify for ACA subsidies or need broader benefits

Bottom Line

Short-term health plans offer fast, budget-friendly, and customizable coverage—but they’re not a one-size-fits-all. By understanding the six key differences from ACA plans, you can make the right decision for your health and financial situation. Choose wisely and protect yourself from unexpected gaps in care.