Short-term health insurance for freelancers is often advertised as the cheap way out of expensive marketplace premiums. Sometimes it really does fit. Other times it leaves self-employed workers with huge bills and no coverage for the care they need most. This guide lays out how these plans work, the rules that changed recently, and when a short-term plan is (and isn’t) a smart move.
Note: Short-term plan rules vary widely by state and have been shifting at the federal level. Verify what’s legal and available where you live before buying.
What Is Short-Term Health Insurance?
Short-term, limited-duration insurance (STLDI) is temporary medical coverage designed to fill a gap, such as the time between jobs or while waiting for another plan to start. Unlike ACA marketplace plans, these plans are not required to follow the ACA’s consumer protections. That’s what makes them cheaper, and it’s also what makes them riskier.
The Rules Have Been Changing
Understanding short-term health plan rules matters because the length and availability of these plans depends on federal policy and, more importantly, on your state:
- 2018 federal rule: Allowed initial terms of up to 364 days and total duration of up to 36 months with renewals
- 2024 federal rule: For plans issued on or after September 1, 2024, limited initial terms to 3 months and total duration to 4 months, and restricted buying another short-term policy from the same insurer within 12 months
- August 2025: The federal government announced it would no longer prioritize enforcement of the 2024 limits and encouraged states to follow suit
The practical result is that policy length now depends heavily on your state and the insurer. In some states, insurers are offering plans lasting up to 364 days again, while other insurers keep shorter limits. States can be stricter than the federal government, and in 2026 there are roughly 15 states (including DC) where short-term plans are effectively unavailable because of bans or restrictive laws.
Pros of Short-Term Health Insurance for Freelancers
Lower premiums. Because these plans can screen applicants and exclude certain benefits, monthly costs are often noticeably lower than comparable marketplace plans. This can be attractive to healthy freelancers who earn too much to qualify for subsidies, especially now that the enhanced credits expired and the subsidy cliff returned.
Year-round enrollment. You can typically buy a short-term plan any time, without waiting for open enrollment or a qualifying life event, and coverage can often start quickly.
Useful for a genuine gap. If you’re waiting for a new plan to start or you’ve just missed the enrollment window without qualifying for a special enrollment period, a short-term plan can provide basic protection against catastrophic bills in the meantime.
Flexibility. You can choose the length and deductible that fit your budget, subject to your state’s limits.
Cons of Short-Term Health Insurance for Freelancers
Medical underwriting. Insurers can decline you or charge more based on your health history. Unlike marketplace plans, they don’t have to accept everyone.
Pre-existing conditions are typically excluded. Care related to a condition you had before the plan started is often not covered, and some plans review claims closely to find conditions that they consider pre-existing.
No guaranteed essential health benefits. Many short-term plans exclude or limit maternity care, mental health services, substance use treatment, and prescription drugs, and they can set dollar caps on what they’ll pay.
No ACA out-of-pocket protection. Marketplace plans limit your annual costs. Short-term plans can leave you exposed to very large bills.
No premium tax credits. Subsidies apply to marketplace coverage, not short-term plans.
Expiration isn’t a qualifying event. When a short-term plan ends, that generally doesn’t open a special enrollment period for marketplace coverage. If your plan expires outside open enrollment, you could end up uninsured until the next window.
Coverage can end and be hard to replace. If you develop a health condition during the plan, you may not be able to renew or buy another short-term plan at a fair price.
State mandates may still apply. A few states have their own coverage requirements with tax penalties, and short-term plans may not satisfy them.
Short-Term vs. ACA Marketplace Plans
| Short-Term Plan | ACA Marketplace Plan | |
|---|---|---|
| Pre-existing conditions | Often excluded | Must be covered |
| Can they reject you? | Yes, based on health | No |
| Essential health benefits | Not required | Required |
| Out-of-pocket cap | Not guaranteed | Required annual cap |
| Premium subsidies | Not available | Available by income |
| Enrollment | Generally year-round | Open enrollment or special enrollment |
| Typical premium | Lower | Higher (before subsidies) |
When a Short-Term Plan May Make Sense
- You’re between jobs or plans and need a bridge for a few months
- You’re young and healthy with no ongoing medical needs
- You’re above the subsidy cutoff and can’t afford full marketplace premiums
- You missed enrollment and have no other option until the next window, and you understand the risks
When to Avoid It
- You have ongoing health conditions or take regular prescriptions
- You’re planning to have a baby or expect maternity care
- You need mental health or substance use coverage
- You’d be financially devastated by a large medical bill
- You can qualify for Medicaid or a subsidized marketplace plan, which usually offer far stronger protection
How to Evaluate a Short-Term Plan Before Buying
- Check your state’s rules. Confirm plans are legal and see the maximum duration
- Read the exclusions. Look for pre-existing condition language, maternity, mental health, and prescription limits
- Look at the out-of-pocket maximum and benefit caps. If there’s no cap, understand what that means
- Confirm the network and whether your doctors are covered
- Check the insurer’s reputation and how claims are handled
- Compare total risk, not just price. A cheap premium can be expensive after one hospital visit
Tax Considerations
Because short-term plans differ from ACA coverage, ask a tax professional whether the premiums qualify for the self-employed health insurance deduction in your situation, and how having short-term coverage interacts with your state’s coverage rules. Our guide on whether you can deduct health insurance as a freelancer explains the general deduction.
Better Alternatives to Consider First
- A bronze or catastrophic marketplace plan, which is cheaper than higher tiers, keeps ACA protections, and is HSA-eligible starting in 2026
- A spouse’s employer plan or COBRA for a temporary bridge
- Medicaid, if your income qualifies
- A special enrollment period, if you’ve recently lost coverage or moved
Our overview of health insurance options for self-employed workers compares these choices.
The Bottom Line
Short-term health insurance can work as a temporary bridge for a healthy freelancer who understands the trade-offs, but it isn’t a substitute for comprehensive coverage. The low premium comes with medical underwriting, exclusions, and no guaranteed out-of-pocket cap. Before buying one, check your state’s rules, read the exclusions carefully, and compare it against a bronze marketplace plan. If a single hospital stay would put your finances at serious risk, comprehensive coverage is usually the safer choice.
This article is for general informational purposes and isn’t personalized insurance, tax, or financial advice. Short-term plan rules differ by state and change over time. Verify current availability and terms with your state insurance department or a licensed insurance professional before buying.