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| Short-Term Health Insurance | ACA Marketplace Insurance |
|---|---|
| Can deny you coverage, charge you more, or refuse to pay for specific care if you have a preexisting health condition | Can’t discriminate based on preexisting conditions |
| Might not cover things like prescription drugs, preventive screenings, maternity care, emergency services, hospitalization, labwork, pediatric care, and physical therapy | Covers all of those benefits, which are considered essential health benefits, and more |
| Might have no limit on what you pay out of pocket for care, or a lifetime limit instead of an annual limit | Must contain an annual out-of-pocket limit; in 2025, it cannot exceed $9,200 for an individual or $18,400 for a family |
| Not eligible for federal subsidies to pay premiums and out-of-pocket costs | Most enrollees qualify for federal financial help |
| May have waiting periods before you’re eligible for coverage for eye surgery or procedures to treat conditions such as kidney disease, allergies, and skin disease | Cannot have waiting periods |
What to Do if You’re in a Short-Term Plan Now
If you bought a short-term health insurance policy before Aug. 31, 2024, your plan’s initial term could still run up to 364 days (depending on your plan and state). You’ll still have the option to renew for a total duration of up to 36 months.
But if you know your plan will expire in 2025, the easiest way to avoid going without coverage is to use open enrollment for a Marketplace plan by Dec. 15. That’s the last day to enroll for a plan that starts Jan. 1, 2025. Then, cancel your short-term plan on Dec. 31.
Note
A Marketplace catastrophic plan might be most similar to a short-term plan but is only available for those under age 30 or with specific hardships or affordability exemptions.
Due to new rules, if your stacked plan or a plan you bought after August 31, 2024 expires in 2025, you may face a challenging situation getting coverage before the next open enrollment period starts in November 2025. To qualify for a Marketplace special enrollment period (SEP), your lost health coverage must be considered “minimum essential coverage.” Unlike workplace, Marketplace, and Medicaid plans, short-term plans don’t fall under this definition.
Your only option would be to sign up for a short-term plan offered by a different insurer, unaffiliated with your current plan. After that plan expires, if you still need coverage, you could buy yet another new plan. This strategy would require one or more new carriers, so you’ll want to see if other short-term insurance carriers are available in your area.
Some (now disallowed) multi-year-renewable plans offered coverage for preexisting conditions after the first year. However, when switching to a new carrier, a preexisting condition could leave you without insurance if the carrier denies coverage or claims.
“If a person loses coverage but can’t get on the Marketplace, they may have no choice but to go without,” said Joshua Brooker, a member of the National Association of Benefits and Insurance Professionals (NABIP).
“If they are an employer, they may be able to set up a group benefits plan for their company, but there are limits to that as well.”
What to Do If You Need Short-Term Coverage
Now
If you need coverage right now, you may want to buy a short-term plan to cover you until the end of the year, but also take advantage of open enrollment to get an ACA plan for however long you need it after that. You have from Nov. 1 to Dec. 15 to buy an ACA plan that will start Jan. 1.
You can buy short-term health insurance anytime. As in the past, you don’t need to wait for an open enrollment period for short-term insurance. The plan may be able to take effect the day after the insurer receives your application. You can also cancel your plan at any time.
After Jan. 15, 2025
If you find yourself needing short-term coverage after Jan. 15, your options are different. Let’s say you lose your job and your employer’s health coverage in February 2025. In the past, a short-term health insurance plan of 10 months would’ve provided coverage until the next ACA open enrollment period.
But with the new rules, a plan you buy in February can only last four months, meaning it will expire in June. If you want ACA coverage after that, you’d need to wait until the next open enrollment period on Nov. 1, with coverage not beginning until Jan. 1, 2026.
In this case, it might be better to skip short-term health insurance coverage after you lose your employer coverage and opt for the ACA’s special enrollment period, which would allow you to enroll due to your job loss, which is considered a qualifying event. You can also cancel ACA coverage at any time.
If offered and affordable, your employer’s COBRA plan may cover you while you wait for new coverage to start.
Future of Short-Term Health Insurance
The rules about short-term health insurance have ping-ponged between administrations in recent years. Under President Trump, the plans were allowed to be sold for initial terms of 12 months, with renewals that could extend the coverage for a total of 36 months.
The Biden administration introduced the latest STHI rules in March, which took effect in September. Depending on who sits in the White House in 2025, these rules may change again.