Health & Medicare
Short-Term Health Insurance Pros and Cons
State availability sourced from HSA for America and healthinsurance.org; federal rule status from the DOL/HHS/Treasury's own 2025 non-enforcement statement.
It exists specifically because ACA-compliant plans are not right for everyone in every situation. That tradeoff cuts in real, specific directions worth understanding before buying.
Data sourced from U.S. Department of Labor, healthinsurance.org
The advantage: genuinely lower cost
A 25-year-old can expect to pay around $75 a month for a short-term plan, well below what an unsubsidized ACA marketplace plan typically costs for the same person.
This gap exists because short-term plans are medically underwritten, unlike ACA plans, and are not required to cover the ACA's essential health benefits, both of which let insurers price the coverage more narrowly and, for a healthy applicant, considerably cheaper.
To estimate your own cost by age and coverage length, the short-term health insurance calculator runs the age-based estimate directly, and flags whether your state allows it at all.
The downside: real coverage gaps, not just a smaller network
The lower price reflects genuinely narrower coverage, not just a smaller provider network. Short-term plans can exclude pre-existing conditions entirely, something illegal on ACA-compliant plans, and are not required to cover essential health benefits, including maternity care in many cases.
Because underwriting is medical rather than guaranteed-issue, an applicant with a meaningful health history can be charged well above the healthy-applicant age-band estimate, or declined for coverage altogether.
Not available everywhere
14 states plus DC (15 total) either ban short-term plans outright or currently have no insurer willing to offer one under that state's own requirements: California, Colorado, Hawaii, Illinois, Maine, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Rhode Island, Vermont, Washington. Some of these are outright legal bans, Illinois's Public Act 103-0649 being a direct example, while others, like Colorado and Washington, do not ban the product by name but impose requirements that have made it commercially unavailable, no insurer currently sells one there even though it is not technically illegal.
The federal duration rule is genuinely unsettled right now
The 2024 federal rule (3-month initial term, 4-month total duration) is on the books but not being enforced as of August 2025 pending new rulemaking that was expected around August 2026 but had not been published as of September 2026. This is an active, evolving situation rather than settled law, so the maximum duration you can actually buy may depend more on what a specific insurer currently offers than on one fixed federal number.
Confirm the actual duration terms of any specific plan you are considering directly, rather than assuming a single nationwide maximum currently applies.
Frequently asked questions
What is the main advantage of short-term health insurance?
Cost. A 25-year-old can expect to pay around $75/month, well below what a comparable ACA marketplace plan without a subsidy typically costs, since short-term plans are medically underwritten and structured to cover fewer benefits than an ACA-compliant plan.
What is the main downside?
It can exclude pre-existing conditions entirely, and does not have to cover the ACA's essential health benefits, including maternity care in many cases. Since it is medically underwritten, an applicant with a significant health history may be charged much more than the age-band estimate, or declined outright.
Is short-term health insurance available in every state?
No. 14 states plus DC (15 total) either ban it outright or have no insurer currently offering it due to state-level requirements: California, Colorado, Hawaii, Illinois, Maine, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Rhode Island, Vermont, Washington.
How long can a short-term plan actually last?
This is genuinely unsettled at the federal level right now. The 2024 federal rule (3-month initial term, 4-month total duration) is on the books but not being enforced as of August 2025 pending new rulemaking that was expected around August 2026 but had not been published as of September 2026.
Given this uncertainty, check the specific duration being offered by any plan you are considering rather than assuming a fixed federal maximum currently applies.