Short Term Health Insurance Cost: What Nobody Tells You About the Real Price Tag

Health insurance is an important safety net. But what if you don’t qualify? 

According to KFF, under half of U.S. adults say it is difficult to afford healthcare costs, and one in four say they or a family member in their household had problems paying for healthcare in the past 12 months. Insurance companies know this, so they came up with a product that seems affordable and provides good coverage, or so it seems. 

Short-term health insurance is like a temporary safety net for your healthcare needs. It’s a type of plan that covers you up to 3 months at a time. This is subject to a total duration of 4 months (Including renewals) under latest federal rule. 

Think of it as a quick fix—like borrowing an umbrella when you know it’s going to rain for a little while. People often grab these plans when they’re in between jobs, waiting for other coverage to start, or just need something affordable to tide them over. It’s also a good option if you’re looking for a policy bridge to Medicare or you’ve missed the open enrollment for the ACA Marketplace (Affordable Care Act).

But is it as affordable as providers advertise? 

At first glance, the short-term health insurance cost sounds pretty tempting. It seemingly provides typical health insurance coverage for a short period and at a low price. 

But at Magnum, we don’t do first glances. This is why we decided to dig deeper and uncover the hidden costs that you might not be aware of, although they can significantly increase your costs. So, it’s time to shed light on this topic. 

Table of Contents

• TL;DR
• Understanding the Hidden Cost Structure
• Timing is Everything
• Short-Term Health Insurance Networks Can Cost You Big
• Comparing Your Real Options
• Final Thoughts

TL;DR

• Short-term health insurance is affordable because it doesn’t cover everything. It’s cheaper than other plans but doesn’t always offer the best value. 
• Extending the duration of short-term health insurance usually increases the costs. 
• Short-term health insurance might work for coverage gaps between jobs, after graduation, or when your original policy expires. 
• Most short-term health insurance plans have limited or no networks, which increases out-of-network fees. 
• The cost and benefits of short-term health insurance differ  between states. 

Understanding the Hidden Cost Structure

Short-term health insurance works differently from regular health plans, and that’s where the trouble starts. These plans keep premiums low by picking only healthy folks and saying “no thanks” to anyone with pre-existing conditions like diabetes or heart issues. Sounds great for your wallet at first, right? 

But here’s the thing: those low-cost premiums you see with short-term health insurance don’t actually cover your real health risks. It’s like buying a cheap umbrella that might not hold up in a big storm. You’re saving money now, but you’re taking a big gamble that nothing serious—like a hospital stay or major illness—will happen while you’re covered.

Unlike regular health plans that spread the risk across tons of people (healthy or not), short-term health insurance plays a different game. It’s all about looking affordable upfront, but it skips out on comprehensive coverage. 

That’s where we step in. As your insurance pro at Magnum, we can find you a plan that’s not just cheap but actually has your back. Short-term health insurance might work for a quick fix, but we’ll help you figure out if it’s too risky for your situation or if a regular plan is the better call. 

Those super-low premiums can trick you into thinking you’re set, but short-term health insurance isn’t built to protect you from big health surprises. With many people already stressing about healthcare costs, it’s no wonder people are drawn to these plans. 

But if you end up needing serious care, those “savings” can vanish fast, leaving you with bills you didn’t see coming. That’s a risky bet, and nobody wants to lose that game.

What Keeps Premiums Low

So, let’s understand why short-term health insurance is cheaper. 

In 2010, the ACA, also known as Obamacare, was enacted to extend health insurance coverage to the uninsured. However, some people aren’t included, according to The Commonwealth Fund. These include undocumented immigrants and those who live in a state that didn’t extend Medicaid. These people naturally consider short-term health insurance. 

But the trick is that short-term health insurance plays by its own rules. They use something called medical underwriting, which is a fancy way of saying they ask a ton of health questions to figure out if you’re “healthy enough” for their plan. If you’ve got any health issues—like asthma, diabetes, or even occasional migraines—they might say “no” or leave those conditions out of your coverage.

The Pre-Existing Condition Trap

Take Sarah, a 32-year-old freelance graphic designer. She applied for short-term health insurance and mentioned she sometimes gets migraines. The insurer gave her a policy but said, “Sorry, anything related to neurological stuff isn’t covered.” Six months later, Sarah needed an MRI for bad headaches, and bam—$2,400 out of her own pocket because her plan didn’t cover it.  

Here’s where it gets even trickier with short-term health insurance. If you develop a new health issue during your plan—like, say, you’re diagnosed with diabetes after a 90-day policy—that condition becomes “pre-existing” when you try to get another plan. 

At Magnum, we can shop around and find you a short-term health insurance policy that actually works by highlighting the Exclusions and Limitations of an insurance plan beforehand. 

We also openly recommend another policy if the available one can leave you exposed. Our agents will explain how to get health insurance and explain all the available alternatives, so you don’t get stuck paying for nothing. 

Guess what? Most short-term health insurance plans won’t cover pre-existing conditions, so you’re either stuck paying for that care yourself or you can’t get a new plan at all. 

It’s like a trap that makes it harder and harder to stay insured, and those costs can pile up fast. Each policy period can make you less insurable, turning a short-term “deal” into a long-term headache.

The big issue here is that short-term health insurance looks like a bargain but can leave you high and dry if your health takes a turn. 

Why Short-Term Health Insurance Costs Can Trick You

When you sign up for short-term health insurance, you might think the price just adds up nicely the longer you need it, like paying for a subscription. But it’s not that simple! These plans have what we call “sweet spots” and “penalty zones” in their pricing. 

For example, a three-month plan might seem super affordable, but if you extend it to six months or a year (according to the old law), the cost doesn’t just double or triple—it can jump way higher than you’d expect. The key is to remember the word “short.” This is meant to be a temporary solution. 

This table shows an example of how the cost of insurance increases with time. 

The 90-Day Pricing Trick in Short-Term Health Insurance

The sweet spot for saving money is usually around 90 days. Why? Because at that length, the plan’s administrative costs (all that paperwork and setup stuff) get spread out just enough to make the daily cost pretty reasonable. It’s like getting a good deal on a bulk buy—but not too bulk. Everyone is happy. 

If you go shorter, like a 30-day plan, you’re paying way more per day because those setup costs don’t get stretched out. Go longer, and insurers start charging you extra with “penalty pricing” because they’re worried about bigger health risks piling up over time.

This pricing game is a problem because it locks you into a narrow window to get the best deal with short-term health insurance. If you need coverage for just a month, you’re overpaying per day. If you need it for longer, those higher costs can sneak up and hit your budget hard. 

When your 90-day policy ends, you face a choice: renew or apply for a new plan.

Renewing seems easier, right? However, if your health has changed, your “existing” conditions won’t be included. This means that you’ll pay more AND you’ll be dealing with more exclusions. 

At Magnum, our independent agents shop for a policy that fits your needs without those pricing traps. Short-term health insurance might seem like a quick fix, but we’ll help you figure out if that 90-day sweet spot works for you or if a different plan—like a more predictable ACA option—makes better sense for your wallet and peace of mind. 

Yes, it means going through underwriting again, but it might offer better rates if you’re still healthy. Remember that the wrong choice can cost you hundreds or even thousands of dollars.

Timing Is Everything

Source: Magnum Insurance 

Short-term health insurance can be a great tool, but only if you use it at the right moment. It’s not just about signing up when you need it—it’s about lining it up with big life changes, like switching jobs, graduating from college, or waiting for new coverage to kick in. 

Planning for Life Changes to Keep Your Money Safe

Short-term medical insurance works best as a bridge to cover those gaps, but you’ve got to be smart about it. For example, you need to think about what healthcare you might need during that time and whether a short-term health insurance plan will actually cover it. 

Get the timing right, and you save money. Get it wrong, and you could end up with big bills or even struggle to get coverage later.

Although short-term health insurance sounds like a budget-friendly fix, it’s risky if you don’t plan it carefully. According to Peterson-KFF Health System Tracker, 28% of adults skipped or delayed healthcare in 2023 because of costs. This means that picking the wrong coverage at the wrong time can leave you stuck. 

Whether you’re between jobs, fresh out of school, or waiting for a new plan to start, we’ll shop around to find the best option for you. Short-term health insurance might be perfect for a short gap, but we’ll also look at options like COBRA or ACA plans to make sure you’re not left with surprise costs or coverage gaps down the road. 

COBRA vs. Short-Term Health Insurance: Which One is Better?

COBRA or Continuation of Health Coverage gives employees the opportunity to extend health insurance coverage between jobs. Sounds too good to be true, right? 

That’s because COBRA comes with higher premiums. And since you’ve lost your job, this doesn’t sound practical. 

So, what do most people do? They consider short-term health insurance. 

Unlike captive agents who work for a single insurance provider, at Magnum, we’re independent agents. This means that we don’t favor a policy at your expense. We also understand that insurance isn’t a one-size-fits-all solution. We will help you weigh the available alternatives and then pick one that actually works for your specific situation. 

As a result, you shouldn’t only look at the monthly costs when comparing the two options. Think of the risk of developing a health condition that would make future coverage expensive or even possible. Believe it or not, sometimes paying more for COBRA actually saves money in the long run.

Helping Graduates Paying Double

After graduation and before getting your first job, most people end up with overlapping coverage periods that waste money. Your student health plan might cover summer while your new job’s coverage starts in fall or winter. 

Short-term health insurance can bridge this gap. However, it’s always the trade-off between paying for duplicate coverage and leaving dangerous gaps.

Why Short-Term Health Insurance Misses the Mark on Preventive Care

Short-term health insurance might seem like a great deal because the monthly payments are low, but here’s the catch: it usually doesn’t cover routine stuff like checkups, screenings, or preventive care. 

That means you’re paying out of pocket for things like your annual physical, mammograms, or colonoscopies—stuff that helps catch health problems early. You’re not just paying premiums; you’re also gambling with your health and wallet if you can’t afford those out-of-pocket costs.

As a matter of fact, about one in four adults (23%) say in 2022 they have taken an over-the-counter drug instead of getting a prescription filled because of cost concerns, and about one in five (21%) say they have not filled a prescription due to the cost, according to KFF. 

At Magnum, we’ll recommend short-term health insurance for a quick gap, but we’ll help you figure out if it’s leaving you exposed to big costs for things like checkups or prescriptions. We can look at other health plans that include preventive care, so you’re not stuck paying for every doctor visit or facing scary health surprises. 

Short-Term Health Insurance Networks Can Cost You Big

Source: Magnum Insurance

Short-term health insurance often comes with some serious catches when it comes to where you can get care. Many plans either have super limited networks—meaning only a few doctors or hospitals are covered—or no network at all. 

If there’s no network, every visit is treated as “out-of-network,” which means you pay way more for the same care. For example, a regular doctor visit that might cost $150 with a typical plan could set you back $400 or more with short-term health insurance. And if you need an emergency room visit? That could mean thousands of dollars in extra costs because you don’t get the discounts a bigger network would offer.

What You Don’t Know About Out-of-Network Charges

Tim Winard’s story, which he shared on KFF Health News, is a great example. Since he and his wife were between jobs and he’d decided to launch his own business, he decided to go against the ACA. Instead, he chose a short-term health policy that works for 6 months. 

Six months later, he was still working on launching his business, so he chose another policy that cost him $500 a month. Then, he needed to get a colonoscopy. His insurer said that he could go to any facility, and they’ll have him covered. 

And they did. The $10,723.19 bill arrived, and Winard discovered that his insurance company covered $817.47. After the insurance discount, he had to pay $7,226.71 out of his pocket. 

When he contacted his insurance provider, he was informed that they capped the insurance payment at a maximum of $1,000 per day ‘within that facility.’ That definition surprised Winard, who said he read his policy to mean that there was a cap on what could be charged for the facility itself, not for all the care he received there. They defined it to include any services at an outpatient facility.

Experts believe that the healthcare cost crisis affects even those with insurance, as medical cost trends are projected to remain at 8.5% for the Group market and 7.5% for the Individual market in 2026, according to PWC. These rising costs put additional pressure on short-term insurers to limit coverage and increase out-of-pocket expenses for consumers.

Short-term health insurance might seem affordable at first, but those network restrictions can make it crazy expensive when you actually need care. You might think you’re saving money, but if your plan doesn’t cover your usual doctor or limits what it pays for big procedures, you’re left footing the bill. That’s not what insurance is supposed to do!

Most people are like Winard: they don’t understand what insurance providers actually mean and how they define coverage. This is why at Magnum, we can explore options like ACA plans that offer wider networks and better discounts. That way, you’re not stuck paying triple for a simple visit.

Differences Between States

Short-term health insurance prices can be wildly different depending on your state, and it’s all because of local rules and competition. For example, you might pay $200 a month for a plan in one state, but cross the border to the next state, and that same coverage could cost you $600! 

That’s because each state has its own regulations about what insurers can offer, and some places have more companies competing, which can keep prices lower. This table shows an example of how policies differ across states according to Forbes and Insured and More. 

How Local Competition Affects Short-Term Health Insurance Costs

At Magnum, we will look at which insurers are offering short-term health insurance where you live and compare their prices and health insurance coverage to make sure you’re not overpaying or getting stuck with a weak plan

The deal with short-term health insurance is that prices and terms depend a lot on how many insurers are competing in your area. In places with just a few insurers, they can charge higher prices and offer skimpier coverage because they’ve got more control. It’s like a small-town diner that charges extra for a burger because it’s the only spot around. 

But in areas with lots of competition, you might find better prices on short-term health insurance, though the plans can sometimes be less predictable. 

If you’re in a place with low competition, short-term health insurance can cost you more and cover less, leaving you stuck with high bills when you need care. 

Comparing Your Real Options

Source: Magnum Insurance

When you’re looking at short-term health insurance, it’s tempting to just focus on the low monthly cost. But hold up—don’t stop there! You’ve got to compare it to other options to see what’s really the best deal. 

For example, you might actually qualify for an ACA marketplace plan that’s cheaper overall and covers way more. There are also things like healthcare sharing ministries or direct primary care, which could work better depending on your situation. 

Are ACA Marketplace Plans Better?

Let’s talk about ACA marketplace plans—they might sound expensive, but they can actually be a steal if you qualify for help. If your income is in the right range, you can get premium tax credits, which are like discounts that lower your monthly payments. 

Enjoy Tax Savings With ACA Policies

For example, Jennifer is a 28-year-old making $32,000 a year. She was about to grab a $240-a-month short-term health insurance plan, but then she checked the marketplace. With premium tax credits, she got a full-on ACA plan for just $95 a month—way less than the $240 short-term plan! Plus, the ACA plan covered checkups, prescriptions, and had a cap on what she’d pay out of pocket ($3,000 max), which her short-term plan didn’t offer. 

Those credits can make a huge difference—say you earn $35,000 a year, a $400 monthly ACA plan could drop to $150 with the discount. That’s a game-changer because ACA plans cover more, like preventive care and protection from huge medical bills, unlike short-term health insurance.

Lower Deductibles You’re Missing

There’s even more good news with ACA plans if your income qualifies for cost-sharing reductions. That’s a fancy way of saying you get lower deductibles (the amount you pay before insurance kicks in) and a cap on your total yearly costs. 

For example, instead of a $6,000 deductible with a short-term health insurance plan, an ACA plan might bring it down to $1,000. That could save you thousands if you need a lot of care! 

The problem with short-term health insurance is that it often leaves you paying full price for things like doctor visits or hospital stays, which can add up fast. By comparing all your options, like exploring health insurance plans or checking out health insurance for self-employed individuals, you can avoid those traps and find coverage that actually protects you.

At Magnum, we’ll check if you qualify for ACA discounts, look at other options like sharing ministries, or see if short-term plans make sense for a quick gap. 

Joining Forces to Share Healthcare Costs

Do you know what car pooling is? It’s splitting the gas price when you and your friends share a ride. This can also be done with health insurance, and it’s called healthcare sharing ministries. 

It’s just like when a group of friends pool their money to help each other pay medical bills. Instead of paying insurance premiums like you would with short-term health insurance, you pay a monthly “share” that goes into a big pot to cover members’ healthcare costs. 

These shares are often lower and more predictable than the premiums for short-term health insurance, which can be tempting but come with risks like limited coverage or surprise bills.

Now, there’s no guarantee every bill will be paid, and there are some rules about who can join (like certain beliefs or lifestyles), but for some people, this setup offers better cost stability and keeps coverage going longer without the gaps you might face with short-term plans.

We’ll compare healthcare sharing ministries with other options, like short-term health insurance alternatives, to see if they’re a good match for your budget and needs at Magnum. If sharing ministries aren’t right for you, we’ll check out ACA plans or other coverage to make sure you’re protected without those sneaky costs short-term plans can hide. 

How Magnum Insurance Helps You Understand Short-Term Coverage Costs

Source: Magnum Insurance

Our team has over 40 years of experience helping people like you find affordable coverage. We know that picking a plan is about more than just the monthly price. There’s a problem with short-term health insurance: it can seem like a great deal, but hidden limits and gaps could leave you with big bills. 

Choosing short-term health insurance isn’t just about finding the cheapest monthly payment. You’ve got to think about things like whether your doctors are covered or if you’ll face huge costs for care that the plan doesn’t include. 

That’s where we come in! We’ve got local agents who are pros at digging into the details of short-term health insurance. We’ll look at your situation—like your health needs and where you live—and figure out the real cost of a plan, including any sneaky limits or gaps. We’ll also help you time your coverage right, so you’re not stuck with a plan that’s risky for your wallet. 

Plus, we make it easy with flexible payment options and our straightforward mobile app to help you keep track of your plan and renewals without any hassle. Want to explore all your options? Check out how choosing the right insurance can protect you from unexpected expenses.

Final Thoughts

Many people mistake short-term health insurance for the answer to sudden health emergencies. But in reality, this is not the case if you’re looking for the best value out there. Short-term health insurance plans reduce costs by excluding many applicants, and you might be found ineligible. They also skip things like checkups, prescriptions, or pre-existing conditions, which can leave you paying a ton out of pocket.

A 90-day plan might seem affordable, but if you need coverage longer, prices can jump. Plus, where you live matters. In other words, short-term health insurance looks cheap because it avoids risk, not because it really protects you.

At Magnum, we’ll shop around and figure out the real cost of short-term health insurance for you, including all those hidden traps like out-of-network fees or uncovered care. 

We’ll also check if something else, like an ACA plan with discounts or even a healthcare sharing ministry, might save you more.

Remember: we aren’t trying to benefit any provider. Our goal is to help you. 

If you’re unsure, you don’t have to figure this out alone. Our team is here to walk you through your options, answer your questions, and give you real peace of mind. Head to our website, click the phone icon at the top right, and you’ll be connected with one of our agents. Or, if you’d rather talk face-to-face, stop by one of our offices in Illinois, Indiana, Arizona, Nevada, New Mexico, or Texas.

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