Short-Term Health Plans Are Back in 2026: What They Cover (and What They Don't)

The Return of the 36-Month Short-Term Plan

Short-term, limited-duration insurance (STLDI) is back as a significant alternative for Americans who find ACA marketplace premiums unaffordable in 2026. The Trump administration issued a non-enforcement statement in August 2025, effectively reinstating the 36-month plan duration that governed the market under 2018 regulations. The Biden-era three-month limit — designed to steer consumers toward ACA-compliant coverage — is no longer being enforced at the federal level.

The timing matters. With enhanced ACA premium tax credits fully expired as of January 1, 2026, and average net premiums more than doubling for many enrollees, short-term plans are drawing new interest from consumers looking to cut costs. Marketing has intensified accordingly.

Before enrolling, understand exactly what you’re buying — and what you’re not.

What Short-Term Plans Actually Cover

Short-term health plans are designed for temporary gaps in coverage. A typical STLDI policy covers:

Emergency room visits and hospitalization
Urgent care visits
Some outpatient procedures and diagnostic imaging
Basic physician office visits, subject to limits
Limited prescription drug coverage (varies significantly by plan)

Premiums are substantially lower than ACA marketplace plans. A healthy 35-year-old non-smoker might pay $80–$200 per month for short-term coverage compared to $450–$700 or more for an ACA silver plan without subsidies in 2026. For someone who lost their premium tax credit and earns above 400% of the federal poverty level (approximately $58,320 for a single adult), that gap is real money.

What Short-Term Plans Do Not Cover

This is where consumer confusion — and serious financial exposure — begins. Short-term plans are not required to comply with the Affordable Care Act. That means they are legally exempt from many protections that ACA-compliant plans must provide.

Pre-Existing Conditions

ACA marketplace plans cannot deny coverage or charge more based on health history. Short-term plans can — and routinely do. Insurers underwrite applicants individually. A history of diabetes, heart disease, asthma, cancer, or even recent prescriptions for common medications can result in a rejected application or a coverage exclusion rider. An exclusion means the plan pays nothing for treatment related to that condition — even if the condition was discovered after enrollment.

The 10 Essential Health Benefits

ACA plans must cover ten essential health benefits, including mental health care, substance use treatment, maternity care, preventive screenings, and prescription drugs. Short-term plans have no such requirement. Maternity coverage is almost universally excluded. Mental health parity protections — which require mental health benefits to be equivalent to medical and surgical benefits — do not apply to STLDI policies.

Guaranteed Renewal

If a serious illness develops during a short-term plan, the insurer can decline to renew the policy at the end of the term. ACA plans cannot deny renewal based on health status. This is a critical distinction for anyone considering a 12- or 36-month short-term plan as a long-term solution.

Out-of-Pocket Maximum Protections

ACA plans cap annual out-of-pocket costs at defined federal limits (2026: $9,200 individual). Short-term plans set their own limits. Some use per-condition or per-occurrence caps rather than an aggregate annual cap — meaning a single expensive illness could result in multiple separate maximums, not one combined ceiling. Read benefit summaries carefully before assuming a stated “out-of-pocket maximum” functions the way it does on an ACA plan.

Preventive Care

Most short-term plans do not cover preventive services at no cost. Routine checkups, colonoscopies, mammograms, and other recommended screenings typically require cost-sharing or are excluded entirely.

Which States Still Prohibit Short-Term Plans

Federal non-enforcement does not override state law. Five states effectively prohibit short-term plans from being sold to consumers, maintaining their own stronger consumer protections:

New York — prohibited under state law
California — banned since 2018
New Jersey — prohibited
Massachusetts — prohibited
Washington — prohibited

Residents of these states cannot purchase short-term plans regardless of federal policy. Additional states have imposed 6-month or 12-month duration maximums shorter than the federal 36-month non-enforcement posture. Check your state insurance commissioner’s website for current rules before shopping.

Who Should (and Shouldn’t) Consider a Short-Term Plan

Potentially Appropriate For:

Individuals in excellent health with no chronic conditions or regular prescriptions
People awaiting employer coverage to begin — for instance, a new job with a 60- or 90-day waiting period
Those who fully understand and accept the coverage limitations in writing and are primarily seeking catastrophic protection only

High Risk For:

Anyone with pre-existing conditions — coverage exclusion riders can leave large claims entirely unpaid
Anyone who might become pregnant during the coverage period
Anyone who relies on mental health or substance use treatment
People who have not read the benefit exclusions section of the policy in full
Anyone who assumes short-term plans are functionally equivalent to ACA coverage — they are not

Alternatives Worth Checking Before Enrolling

Before signing up for a short-term plan, compare these options:

ACA Catastrophic Plans

Adults under 30 qualify automatically. Adults 30 and older may qualify through a hardship exemption — including situations where marketplace premiums exceed 8.09% of household income in 2026. Catastrophic plans cover the ten essential health benefits and provide ACA-compliant coverage at meaningfully lower premiums than silver or gold tiers, without the coverage exclusions of short-term plans.

Medicaid

In the 40 states plus Washington D.C. that have expanded Medicaid, eligibility extends to adults with income at or below 138% of the federal poverty level — approximately $22,025 per year for a single adult in 2026. Medicaid provides full coverage at minimal cost. Check eligibility before assuming it’s not an option; many people earning more than expected qualify.

COBRA

After leaving employer coverage, COBRA preserves ACA-compliant benefits for up to 18 months (36 months in certain qualifying events). The cost is high — 102% of the full plan premium — but it carries no underwriting, no coverage exclusions, and no pre-existing condition gaps. Compare the COBRA premium against ACA marketplace options before defaulting to a short-term plan.

ACA Special Enrollment Period

Losing coverage — including job-based coverage — triggers a 60-day Special Enrollment Period on the marketplace. For those who qualify for any remaining premium tax credit (generally income below 400% FPL, or approximately $58,320 for a single adult in 2026), the marketplace may still be competitive relative to short-term alternatives. Use the healthcare.gov subsidy calculator with accurate income figures before ruling it out.

Questions to Ask Before Buying

If a short-term plan genuinely fits the situation, get answers to these before paying a premium:

What pre-existing conditions does this plan exclude? Request the exclusion rider in writing before enrollment.
Is the out-of-pocket maximum an aggregate annual cap or per-condition? Per-condition caps can leave you exposed to unlimited liability in complex medical situations.
Is mental health care or maternity coverage included? Do not assume — read the benefit schedule.
Can the insurer decline to renew if claims are filed? Know the exact renewal terms in writing.
Is this plan licensed in my state? Verify with the state insurance commissioner’s office before purchasing.

Frequently Asked Questions

Can I switch from a short-term plan to an ACA plan mid-year?

Not automatically. Having a short-term plan and wanting to switch is not, by itself, a qualifying life event for a Special Enrollment Period on the marketplace. You would need to wait for the next annual Open Enrollment Period unless you experience a separate qualifying event such as losing other coverage, getting married, having a baby, or moving to a new coverage area. Some states have additional SEP triggers beyond the federal list. This is an important consideration before enrolling in a short-term plan: once you are on one, switching to ACA coverage mid-year may not be possible without an independent qualifying event occurring first.

Does a short-term plan satisfy the individual mandate in states that have one?

No. In all five states and the District of Columbia that maintain individual mandate penalties (California, Massachusetts, New Jersey, Rhode Island, and Vermont), short-term plans do not count as minimum essential coverage. Enrollees in these states will owe a state tax penalty when they file their returns. In New Jersey, the penalty for 2026 is $695 per adult or 2.5 percent of household income, whichever is higher. California follows a similar penalty structure. Before enrolling in a short-term plan while residing in a mandate state, calculate whether the total premium savings over the year actually outweigh the penalty cost plus the additional coverage gap risk you are taking on.

What happens if I get diagnosed with a serious illness while on a short-term plan?

This is one of the most significant risks of short-term coverage and the one most often underestimated. If you are diagnosed with cancer, heart disease, or another major condition during your plan term, the short-term plan will typically cover initial treatment under its stated benefit limits. Those limits may include annual or per-condition caps that leave you with substantial out-of-pocket exposure for expensive ongoing care. The larger problem arises at renewal. The insurer can decline to renew your policy based on your new diagnosis. At that point you have a pre-existing condition that the short-term insurance market can exclude entirely, and you may need to wait for the next ACA Open Enrollment period to obtain coverage that cannot legally exclude you. During that gap, any ongoing treatment costs would be entirely self-pay.

Are telehealth services covered?

Some short-term plans include telehealth as an added benefit, often through a third-party provider network like Teladoc or MDLive. Coverage and cost-sharing varies significantly by plan and carrier. Some include unlimited virtual visits at no additional cost as a plan selling feature. Others subject telehealth visits to the same deductible and coinsurance structure as in-person visits, which can make them surprisingly expensive if you have not yet met your deductible. Verify the specific telehealth benefit structure, including which medical conditions can be treated virtually and what the out-of-pocket cost will be, before assuming telehealth provides meaningful low-cost access to care.

Common Pitfalls When Comparing Short-Term and ACA Plans

Comparing monthly premiums without comparing total possible cost in a bad year. A short-term plan with a $150 monthly premium and a $10,000 per-condition benefit cap looks extremely attractive next to an ACA silver plan at $500 per month. But if you need a surgery that costs $80,000, the short-term plan pays its $10,000 cap and you owe $70,000 out of pocket. The ACA plan out-of-pocket maximum caps your total exposure at $9,450 for the entire year regardless of how expensive the treatment turns out to be. Total possible cost in a worst-case scenario is the comparison number that actually matters for financial planning, not monthly premium in isolation.

Assuming that renewable means guaranteed renewable. Some short-term plans market themselves prominently as renewable for up to 36 months. In insurance terminology, renewable means you can submit an application to continue coverage when your current term ends. It does not mean the insurer is legally required to accept that application. If you file expensive claims during your initial term, the insurer can review your claims history and decline your renewal. ACA-compliant plans, by contrast, offer guaranteed renewal by law regardless of your claims history or health status changes. The word renewable means very different things in these two insurance markets and the distinction is critical to understand before enrolling.

Not reading the full exclusion list before enrolling. Every short-term plan maintains a detailed list of excluded conditions, services, and circumstances. Common exclusions beyond the well-known pre-existing condition exclusion include pregnancy and childbirth, elective and cosmetic procedures, bariatric and weight loss surgery, all dental and vision care, routine physical examinations that are not medically necessary, and organ transplant procedures. Some plans also exclude treatment for any medical condition that first manifests symptoms within the first 30 to 90 days of coverage, even if you had no prior diagnosis or awareness of the condition. Read the complete exclusion list before enrolling in any short-term plan, not after you have already filed a claim and been denied.

Relying on marketing materials instead of the actual policy document. Short-term plan advertising consistently emphasizes low premiums, broad provider network access, and fast enrollment. The actual policy document, formally called the certificate of coverage, contains all of the binding contractual terms including exclusions, limitations, and termination conditions. Marketing materials are promotional and are not contractually binding. If the advertising materials describe the plan as providing comprehensive coverage but the certificate of coverage explicitly excludes mental health services, substance use treatment, and maternity care, the certificate controls in any claim dispute. Always request, receive, and carefully read the certificate of coverage before completing enrollment in any short-term health insurance plan.

The Bottom Line

Short-term plans serve a legitimate but narrow purpose: temporary, emergency-level coverage for healthy individuals who fully understand what they are giving up. For most people — particularly those with any health history, families planning pregnancies, or anyone relying on mental health care — the coverage gaps create financial risk that advertising rarely discloses.

The return to 36-month plan durations makes short-term plans look more like permanent coverage than they are. They are not. Before enrolling, exhaust all ACA-compliant options: Medicaid eligibility check, catastrophic plan qualification, COBRA comparison, and marketplace subsidy calculator. Any plan that doesn’t involve medical underwriting should be treated as the baseline standard — not a premium being avoided.