Chicago – November 16, 2025
Unlike most insurance, these plans are not required to cover preexisting conditions or even basic needs such as maternity care and mental health. Their coverage is so full of holes that five states have banned their sale, according to KFF, a nonpartisan health policy research group. Even some major insurers have questioned whether relying on the short-term plans is a good idea, warning that many consumers could mistake them for comprehensive coverage. The Biden administration referred to them as “junk” plans.
The policies tend to be cheaper, though, costing as little as half as much as a plan sold on HealthCare.gov or state-run marketplaces created by the landmark Affordable Care Act, also known as Obamacare. For example, for a 40-year-old nonsmoker in Florida, the cheapest ACA plan may cost about $500 a month, while a short-term plan would be $320. Millions of people have signed up for them.
Millions looking for cheaper options
Now, as millions of consumers see huge spikes in Obamacare costs, many seeking a cheaper alternative will entertain the short-term plans as a viable option, insurance agents said.
“Costs continue to go up, leaving individuals, families, and businesses scrambling to find and keep the coverage they need,” said Kelly Loussedes, vice president of NABIP, a trade group representing more than 100,000 licensed health insurance agents, brokers and consultants. “It’s essential that consumers understand these plans are not comprehensive coverage.”
Andy Mided, a Chicago-area national health insurance agent and consultant, said he has been flooded with calls from Obamacare enrollees who are looking for a cheaper alternative.
“There’s been a huge influx of people asking me, ‘What do I do?,’” he said.
Mided said the short-term plans are too risky for his clients. Given their gaps in coverage, he said, “I couldn’t sleep at night if I sold that to somebody.”
In addition to the five states that have banned them – including California and New York – nine states have rules so prohibitive that no short-term plans are offered, leaving 36 states where they are sold, KFF has found. Nearly half of the plans do not cover outpatient prescription drugs and 40 percent do not cover mental health services, according to KFF. All ACA-compliant plans must cover such services.
Some insurance agents, though, said the short-term plans can work for some: those who are healthy, need it only for a few months between jobs or before they reach 65 and enroll in Medicare and have incomes too high to qualify for ACA subsidies.
“It’s an important option to keep on the table,” said Joshua Brooker, a Pennsylvania-based insurance agent and consultant.
Some insurers are preparing for new customers. Last month, UnitedHealth and its subsidiary, Golden Rule Insurance, announced new sales incentives to agents selling the short-term plans.
