Short-Term Health Insurance USA 2025 – Rules, Costs, Pros & Cons (with Official Links)
Updated for 2025 with verified government resources. This guide explains what short-term health insurance (STLDI) is, how recent federal rules affect plan length, who should consider it, and safer alternatives like Marketplace coverage, COBRA, Medicaid, and CHIP. Every external link below points to an official U.S. site to avoid 404s and outdated info.
1) What is short-term health insurance?
Short-term, limited-duration insurance (STLDI) is temporary medical coverage intended to bridge a gap—between jobs, outside Open Enrollment, or while waiting for other coverage to start. These plans are not individual market (ACA) coverage and generally don’t have to cover the ACA’s essential health benefits. They can be issued year-round and typically start quickly (often within days). The trade-off: fewer protections, tighter limits, and exclusions that don’t apply to ACA plans.
2) 2025 rules & disclosures (what changed)
Federal agencies finalized rules that apply to new STLDI sold or issued on or after Sept 1, 2024. In short, they limit the length of these plans and strengthen consumer notices so people understand the differences from ACA coverage. The rule defines what counts as “short-term” and restricts renewals to prevent multi-year coverage disguised as temporary. Some plans issued before that date may continue for the period allowed under prior rules, but new sales must follow the tightened limits. States may add stricter rules (for example, some states prohibit STLDI entirely). For authoritative details, see CMS and the Federal Register links in the box above.
3) Who is (and isn’t) a good fit
- Between jobs and waiting for employer coverage to begin within a few weeks.
- Missed Open Enrollment and won’t qualify for a Special Enrollment Period (SEP) for Marketplace coverage.
- Healthy adults who want catastrophic-style protection (ER, hospital) during a short gap.
- Temporary U.S. residents or students who need brief protection while arranging long-term coverage.
- Anyone with ongoing conditions, regular prescriptions, pregnancy plans, or mental health care needs.
- People who qualify for subsidies on Healthcare.gov (often much lower net premiums than STLDI).
- Those who need guaranteed issue, pre-existing condition coverage, preventive care with no cost-sharing, or comprehensive benefits.
Before you buy short-term, check if you can enroll in subsidized comprehensive coverage: HealthCare.gov (Marketplace) See if you qualify for a SEP
4) Coverage scope & common exclusions
STLDI can cover emergency room visits, inpatient hospital care, some imaging and labs, and limited outpatient services—but only as defined in the policy. It may exclude or sharply limit:
- Pre-existing conditions (look-back periods can apply to anything treated or diagnosed before the policy starts).
- Maternity care and mental health/substance use services.
- Prescription drugs (some plans offer discount cards rather than true Rx benefits).
- Preventive services (e.g., vaccines, screenings) that ACA plans cover without cost-sharing.
- Annual or lifetime dollar caps (e.g., $250,000–$2,000,000). Once you hit the cap, the plan stops paying.
Because STLDI isn’t ACA-compliant, it doesn’t have to follow the essential health benefits or cost-sharing caps that apply to Marketplace policies. That’s why reading the certificate before purchasing is crucial.
5) Costs in 2025: premiums, deductibles, caps
Pricing varies by age, state, and plan design, but common patterns hold:
- Premiums: Often lower than unsubsidized ACA premiums for healthy applicants (e.g., $80–$250/month individual), but with narrower benefits.
- Deductibles: Typically high (e.g., $2,500–$10,000).
- Coinsurance & out-of-pocket maximums: May not mirror ACA protections; read the schedule of benefits carefully.
- Benefit caps: Check per-service and policy-year limits; many policies include overall maximums.
Bottom line: STLDI can be inexpensive up front, but a poorly chosen plan may leave you exposed to large bills if something significant happens during the gap. Compare against a subsidized Marketplace plan before deciding.
Preview Marketplace plans & prices USA.gov – Health insurance basics
6) How to shop safely (step-by-step)
- Check for a Special Enrollment Period (SEP) first. Losing job-based coverage, moving, marriage, or a baby can qualify you. Use the official screener: healthcare.gov/screener.
- Confirm state rules. Some states ban or tightly restrict STLDI. Your state DOI (insurance department) site lists what’s allowed.
- Get the full policy (certificate) before paying. Search for terms like pre-existing, prescription, mental, maternity, maximum, exclusion.
- Look for the federal notice. New plans must display clear disclaimers explaining STLDI is not ACA coverage and may be limited.
- Check provider network rules. Many STLDI plans pay much less out-of-network.
- Calculate worst-case cost. Deductible + coinsurance + any benefit caps for a hospitalization scenario.
- Plan your exit. Mark your calendar to switch to comprehensive coverage as soon as eligible (new job, Open Enrollment, or SEP).
7) Compare your options
| Option | Pros | Cons | Best when… | Where to start |
|---|---|---|---|---|
| Short-Term (STLDI) | Low premiums; fast start; year-round purchase | Excludes pre-existing; limited benefits; dollar caps; short duration | Healthy adult needs a brief (≤4 months) bridge | CMS Fact Sheet |
| Marketplace (ACA) | Comprehensive EHB; pre-existing covered; income-based subsidies | Must enroll during OE or SEP; premiums without subsidies can be higher | Need full benefits or have conditions/prescriptions | HealthCare.gov |
| COBRA | Keep the same employer plan & network | Can be expensive (lose employer contribution) | You want continuity after leaving a job | DOL – COBRA |
| Medicaid / CHIP | Low or no cost; comprehensive; year-round enrollment | Income/resource limits; provider access varies by state | Income qualifies; children’s coverage via CHIP | Medicaid & CHIP info |
8) Real-life scenarios
A) Job gap (6 weeks)
Alex leaves a job on May 31 and starts a new one July 15. New coverage begins Aug 1. Because the gap is short and Alex is healthy, a short-term plan with hospital/ER focus could make sense if the new federal duration rules are observed. Alex sets a reminder to cancel the STLDI the day employer coverage starts and keeps all EOBs for taxes and records.
B) Missed Open Enrollment, has meds
Priya missed Open Enrollment and needs brand-name prescriptions monthly. A short-term plan would likely exclude or limit Rx, so she uses the screener to see if any life event qualifies her for a SEP. She discovers losing student coverage counts, enrolls through Healthcare.gov with subsidies, and gets full Rx coverage.
C) Freelancer between clients
Mateo freelances and expects variable income. He estimates annual income on the Marketplace, qualifies for APTC, and chooses a Silver plan with cost-sharing reductions instead of STLDI. The net premium is close to a short-term plan, but benefits are far broader.
9) FAQ
Is a short-term plan the same as an ACA plan?
No. STLDI is excluded from the definition of individual market coverage and does not have to follow ACA rules (essential health benefits, pre-existing coverage, annual OOP caps). That’s why premiums look cheaper. The policy notice must explain these differences clearly.
How long can I keep a short-term plan in 2025?
For plans sold or issued on/after Sept 1, 2024, federal rules limit new STLDI to a 3-month initial term and a total duration of no more than 4 months including renewals, subject to stricter state rules. Always read the policy and check your state DOI page.
Can I buy STLDI if I qualify for a SEP?
You can, but if you qualify for a SEP, a subsidized Marketplace plan is usually safer and often cheaper after tax credits. Use the official screener first.
What if I get sick during my short-term plan?
Claims are subject to the plan’s limits and exclusions. If your condition is considered pre-existing or outside the covered services, the plan may not pay. Keep all EOBs and records, and transition to comprehensive coverage as soon as eligible.
Can I cancel a short-term plan early?
Usually yes (check the policy). Coordinate start dates so your new coverage begins the day after STLDI ends to avoid gaps or overlap.
Will a short-term plan affect my ability to enroll in Marketplace coverage?
No—having STLDI doesn’t block Marketplace enrollment, but you still need a qualifying event for SEP or you must wait for Open Enrollment.
Next steps (safe links)
Check if you qualify for a Special Enrollment Period Preview Marketplace plans & prices Learn health insurance basics (USA.gov)
10) Sources – official links only
- Centers for Medicare & Medicaid Services (CMS) – Short-Term, Limited-Duration Insurance Fact Sheet (final rule overview & applicability dates): cms.gov/newsroom/fact-sheets/…
- Federal Register – Final Rules: federalregister.gov/documents/2024/04/03/2024-06551/…
- Dept. of Labor – STLDI Statement (Aug 7, 2025): dol.gov/…/stldi-statement-08-07-2025
- CMS – Statement PDF (Aug 7, 2025): cms.gov/files/document/statement-regarding-short-term-limited-duration-insurance.pdf
- HealthCare.gov – Marketplace home: healthcare.gov | Special Enrollment Period: healthcare.gov/coverage-outside-open-enrollment/special-enrollment-period/ | Preview plans: healthcare.gov/see-plans/
- USA.gov – Health insurance overview: usa.gov/health-insurance
Disclaimer: This article is informational only and not legal, tax, or financial advice. Insurance availability and rules vary by state and can change; always review the actual policy and verify current federal/state guidance before purchasing.
