How do ACA Plans Compare to Short-Term Health Plans?

When it comes to buying health insurance, there are a ton of options out there—even back in 2019, that was already the case. But more choices don’t always make it easier to decide what’s best for you.

Two of the most common options are short-term health insurance and ACA-compliant (Affordable Care Act) major medical insurance. Both can help cut down your medical expenses and come in different price ranges. But how exactly are they different, and why would you choose one over the other?

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Short-Term Plans: Great for Life’s “In-Between” Moments

**ACA Plans Compare to Short-Term Health Plans**

Short-term health insurance is perfect if you’re in a temporary situation or just need coverage fast. People choose these plans for lots of reasons:

You want a cheaper alternative to ACA plans
Your job doesn’t offer health insurance
You’re between jobs or waiting for work benefits to kick in
You just graduated and no longer qualify for your parents’ plan
You missed the ACA open enrollment and don’t qualify for a special enrollment period

These plans are available all year, flexible in length (as short as 30 days), and usually cost much less—sometimes 50% or more less—than ACA plans. However, they’re not offered in every state and the maximum coverage period varies depending on where you live.

ACA Plans: Comprehensive Coverage with All the Benefits

ACA plans are ideal if you want full coverage, have a pre-existing condition, or qualify for financial help (subsidies). These plans cover all 10 essential health benefits, including things like emergency care, maternity care, and prescription drugs. Plus, you can’t be denied coverage due to your health history.

Also Read: How does the Massachusetts Health Connector Work?

Need Insurance Quickly? Short-Term Plans Can Start Right Away

One major perk of short-term plans is speed. You can apply any time of the year, and if you’re approved, your coverage could start as soon as the next day.

ACA plans, on the other hand, have a fixed open enrollment period (usually Nov. 1 – Dec. 15) or require a special life event to apply outside that window—like having a baby, getting married, or moving.

ACA coverage typically kicks in 30 to 45 days after you enroll.

What Do These Plans Cover?

Short-term plans often include doctor visits, hospital stays, and treatment for unexpected injuries or illnesses. Some also cover mental health or offer optional benefits like prescription drugs. But keep in mind—they usually ask health questions during the application process and don’t cover pre-existing conditions.

ACA plans, by law, must include coverage for all essential health services—no questions asked. Everyone is accepted, regardless of health history, and rates don’t change because of pre-existing conditions.

Customizing Your Coverage

Short-term health insurance isn’t one-size-fits-all. You can choose:

How long your policy lasts
The deductible you’re comfortable with
Extra benefits that suit your needs

ACA plans work a bit differently. They come in four levels—bronze, silver, gold, and platinum—based on how much you and the insurer each pay. You choose the level that fits your budget and health needs.

Also Read: Which Insurance Plans Cover Self-Employed Individuals?

What About Monthly Costs?

Short-term plans are typically much cheaper—often half the cost or even less compared to ACA plans (if you don’t qualify for subsidies). The exact price depends on your deductible and any added benefits you choose.

ACA plans usually cost more because they cover more and follow strict rules. However, subsidies are available based on income, which can lower your monthly premium significantly. Short-term plans are not eligible for these subsidies.

Where to Buy Your Plan

You can buy short-term plans online any time—directly from insurance companies, on insurance websites, or through agents and brokers. They’re not sold through ACA exchanges and aren’t available in every state.

ACA plans are available through the federal or state marketplaces, and also through agents, brokers, or insurers. These plans are available nationwide.

See Any Doctor You Want (Mostly)

One cool feature of many short-term plans is no network restrictions. That means you can see any doctor or go to any hospital you like.

With ACA plans, you’re usually limited to providers in-network. If you go outside the network, you’ll likely pay more out of pocket.

Also Read: What Coverage do Gig Workers Qualify for?

What About Tax Penalties?

Since January 1, 2019, there’s no federal tax penalty for not having ACA-compliant insurance. So if you go without insurance or choose a short-term plan instead, you won’t be penalized—at least at the federal level. However, some states have their own penalties and rules, so it’s best to check local laws.