Short-Term Health Insurance for Coverage Gaps

Genuinely useful for a defined gap between real coverage — genuinely risky as a long-term substitute. Here's how to tell which situation you're in.

Short-term health insurance exists for one specific job: bridging a defined gap between two periods of real coverage. It's genuinely useful for that — and genuinely risky as a long-term substitute. Here's how to tell which situation you're in.

What actually changed recently

Short-term plan duration rules have shifted meaningfully. A 2024 federal rule had capped these plans at a 3-month initial term plus one 1-month renewal (4 months total). In August 2025, federal enforcement of that cap was paused, and by 2026 several states — including Texas, Georgia, and Florida — allow initial terms up to 364 days with renewals extending total coverage up to 36 months. Rules vary meaningfully by state, so confirm what's currently allowed where you live before assuming either the old or new limits apply.

What it actually costs vs. the alternatives

For someone who qualifies for ACA marketplace subsidies (roughly $15,000-$60,000 individual income in 2026), a subsidized marketplace plan is very often cheaper than short-term coverage and comes with real protections short-term plans don't have — check subsidy eligibility before defaulting to short-term.

What you're giving up

• Pre-existing conditions are excluded entirely — any condition diagnosed or treated before enrollment isn't covered
• No guaranteed renewal — unlike ACA-compliant plans, a short-term policy simply ends at the end of its term. Get seriously ill during the term, and you may not be able to get a new short-term policy after
• Thin benefit coverage — a KFF review of 200 short-term plans found only about 60% cover mental health services, 60% cover substance abuse treatment, and 52% cover prescriptions; maternity care is rarely included at all
• Annual/lifetime benefit caps — some plans cap total benefits as low as $100,000, unlike ACA-compliant plans which have no such cap

When it's the right call

A defined, short gap with a known end date — between jobs with a start date already set, waiting out a new employer's benefits waiting period, or a missed open enrollment window without a qualifying life event — is exactly the scenario short-term coverage is built for. A healthy person with no ongoing prescriptions bridging 60-90 days is the clearest use case.

When it's the wrong call

Any ongoing health condition, planned pregnancy, regular prescriptions, or genuine uncertainty about how long the gap will last are all reasons to look harder at COBRA or an ACA marketplace plan first — even at a higher sticker price, the guaranteed coverage and renewal protections often outweigh the short-term savings once you actually need care.