Short-Term Health Plan Calculator
The two policies, and the year you are betting on
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Educational estimate only. Confirm the assumptions, current rules, fees, and rounding that apply to your situation before making a decision.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the monthly premium of the ACA plan you would otherwise buy, after any premium tax credit. Use the net figure, because that is what you would really pay, and a credit often closes most of the gap on its own.
- 02
Add that plan's deductible and out-of-pocket maximum. The out-of-pocket maximum is what makes an ACA plan behave differently in a bad year, so it matters more than the deductible here.
- 03
Enter the short-term policy's monthly premium, deductible and coinsurance, then its benefit cap: the most it will pay, whether that is stated per condition or for the year. The cap is usually where the real difference between the two policies lives.
- 04
Enter the medical bills you expect in a normal year, then a single serious claim to test: a surgery, a birth or a bad accident. The page prices both a quiet year and a bad one, because a short-term policy is a bet on the quiet one.
- 05
Read the claim at which the saving disappears. Below it the cheaper premium is ahead; above it the ACA plan's cost-sharing and its cap take over, usually very sharply.
Formula
Premium saved for the year = (ACA monthly premium − short-term monthly premium) × 12. On the ACA plan, your share of any claim is everything up to the deductible, then the coinsurance percentage above it, capped at the out-of-pocket maximum. On the short-term policy there is no cap: the plan pays (claim − deductible) × (1 − coinsurance), limited by the benefit cap, and you pay the rest of the claim, so your share is the claim less whatever the plan actually paid. Total cost either way = premium × 12 + your share. The claim at which the saving disappears is found by walking both cost curves up until the cheaper policy changes.
Example
Someone between jobs compares a $520 ACA plan, with a $6,000 deductible, 20% coinsurance and a $9,200 out-of-pocket maximum, against a $180 short-term policy with a $5,000 deductible, 30% coinsurance and a $250,000 benefit cap. The premium saving is $4,080 for the year. In a quiet year with $1,500 of care the short-term route costs $3,660 against $7,740, so it is clearly ahead. On a $120,000 claim the short-term policy pays $80,500, being 70% of the $115,000 above its deductible, and leaves $39,500 unpaid, so the year costs $41,660 against $15,440 on the ACA plan, which stops at its out-of-pocket maximum. That is $26,220 worse. The saving disappears at about $33,000 of claims. At $400,000 of claims the ACA plan still costs $15,440 while the short-term route reaches $152,160.
Definitions
- Short-term, limited-duration insurance
- A policy sold outside the Affordable Care Act rules, limited under the 2024 federal rules to 3 months initially and 4 months in total including renewals.
- Pre-existing condition exclusion
- A clause letting an insurer refuse to pay for anything related to a condition you had before the policy started. ACA plans cannot use one; short-term policies can.
- Essential health benefits
- The ten categories of care an ACA plan must cover, including maternity, mental health and prescription drugs. A short-term policy need not cover any of them.
- Benefit cap
- A ceiling on what a policy will pay, stated per condition or for the year. Everything above the cap is yours. ACA plans are not allowed to cap essential health benefits this way.
- Out-of-pocket maximum
- A ceiling on what you pay in a year. ACA plans must have one; short-term policies generally do not, which is what makes a large claim so much worse under one.
Good to know
What a short-term plan is under the 2024 federal rules
Short-term, limited-duration insurance is health coverage sold outside the Affordable Care Act framework. The category exists to fill genuine gaps, such as the weeks between leaving one job and starting another, and because it sits outside the ACA it is not bound by the rules that make ACA plans expensive: it can decline applicants, exclude conditions, omit benefits and cap what it pays. How long such a policy may last has swung back and forth with successive administrations, which is why the current rule needs stating with its date. The rules now in force were finalised on 3 April 2024 as Federal Register document 2024-06551, titled Short-Term, Limited-Duration Insurance and Independent, Noncoordinated Excepted Benefits Coverage. The regulatory text defines short-term, limited-duration insurance as coverage with an expiration date no more than 3 months after its original effective date and, taking any renewals or extensions into account, a duration no longer than 4 months in total. To stop the limit being circumvented, a new policy issued by the same insurer, or another insurer in the same corporate group, to the same policyholder within the 12 months beginning on the original effective date counts as a renewal. The rules apply to new policies sold or issued on or after 1 September 2024. A search of federalregister.gov on 16 September 2026 found no later federal rule amending them, so this is the federal position as it stands. Two qualifications matter in practice. States regulate insurance directly and may be stricter than the federal floor: several limit these policies further and some prohibit them outright, so your state may allow less than four months or nothing at all. And the federal limit constrains the product, not your need. A gap in coverage that runs longer than four months cannot be bridged by renewing one of these policies with the same insurer, which is precisely the situation where people find themselves uninsured without expecting it.
The four things a short-term policy can refuse to pay
The premium saving on a short-term policy is real, and so is the reason for it. Four differences from an ACA plan account for most of the gap, and each one is a transfer of risk from the insurer to you. The first is pre-existing conditions. ACA plans may not consider your medical history at all. Short-term policies can, both at application and at claim time, and the definition of a pre-existing condition can be broad enough to reach a symptom you had not yet had diagnosed. A claim can be investigated and denied months after the policy was issued, which is the failure mode that causes the most harm, because the coverage appeared to exist right up to the moment it was needed. The second is the essential health benefits. ACA plans must cover ten categories including hospital care, prescription drugs, maternity and newborn care, mental health and substance use treatment, and rehabilitation. A short-term policy need cover none of them, and maternity care in particular is very commonly excluded. The third is the benefit cap. ACA plans may not put a dollar limit on essential health benefits. Short-term policies routinely cap what they will pay, whether per condition or for the policy term, and everything above the cap is yours. The fourth is the absence of an out-of-pocket maximum. An ACA plan must have a ceiling on your share, and for 2026 CMS set that limit at $10,600 for self-only coverage. A short-term policy generally has no ceiling at all, so your share keeps growing with the claim. That last point is what the arithmetic on this page exposes most clearly, and it is why the comparison must be run on a serious claim as well as an ordinary year. Two further consequences follow: no premium tax credit applies to a short-term policy, and it is not Marketplace coverage, so losing it does not by itself open a special enrollment period. The policy document is the authority on every one of these points, and it is worth reading the exclusions before the premium.
Pricing a quiet year against a bad one
A short-term policy is a bet that the year will be uneventful, and the honest way to evaluate a bet is to price both outcomes rather than the one you are hoping for. The page does that deliberately, asking for the care you expect in a normal year and, separately, one serious claim to test. In the example a $180 short-term policy is compared with a $520 ACA plan, saving $4,080 of premium over a year. In a quiet year with $1,500 of care the short-term route costs $3,660 against $7,740, and it is comfortably ahead. That is the case the salesperson describes, and for many people in many years it is what happens. The bad year looks entirely different, and the mechanism is worth following rather than just the total. On a $120,000 claim the short-term policy applies its $5,000 deductible and then pays 70% of the remaining $115,000, which is $80,500, well within its $250,000 benefit cap. But it pays nothing further, so $39,500 of the claim is yours, and with premiums the year costs $41,660. The ACA plan takes its $6,000 deductible and 20% coinsurance but stops at its $9,200 out-of-pocket maximum, so the same claim costs $15,440 for the year including premiums. The short-term route is $26,220 worse, and the $4,080 premium saving covers roughly a sixth of the difference. The crossover comes at about $33,000 of claims for the year. Below it the cheaper premium keeps the short-term policy ahead, and at $25,000 of claims it is still ahead at $13,160 against $15,440. Above the crossover the gap widens without limit, because one plan has a ceiling and the other does not: at $400,000 of claims the ACA plan still costs $15,440 while the short-term route reaches $152,160. That divergence, not the crossover point itself, is the thing to weigh, and it assumes the claim is covered at all.
When a short-term policy is the sensible answer
None of this makes short-term coverage a bad product. It makes it a specific one, and there are situations where it is clearly the right choice. The clearest is a genuinely short, known gap: you have left one job, you start another in ten weeks, the new employer's plan begins on day one, and you are healthy with no ongoing treatment. Four months of federally permitted coverage fits that shape precisely, and paying a low premium to be protected against an accident is sensible. It is also worth considering when the alternative is nothing at all, which is a real situation for people in the coverage gap in states that did not expand Medicaid, where income is too low for a premium tax credit and too high for Medicaid. Some protection is better than none, provided its limits are understood. Before buying, three checks are worth making, and each can change the answer. First, price the ACA plan after any premium tax credit rather than at its sticker price. This page asks for the net premium for that reason, and people are often surprised by how much a credit closes the gap, particularly at lower incomes. Second, check whether you qualify for a special enrollment period. Losing job-based coverage is a qualifying life event that opens a 60-day window to buy a Marketplace plan outside open enrollment, so the choice is frequently not between a short-term policy and nothing. Third, check COBRA, which continues your existing employer plan with the same doctors and the same deductible progress, and is sometimes cheaper than expected, especially where an employer subsidises it as part of a severance arrangement. If you do buy a short-term policy, read the pre-existing condition language closely, confirm what the benefit cap actually is, and diary the expiration date, because these policies end on a fixed day and their ending is not itself a qualifying event for Marketplace coverage. The COBRA and health insurance cost pages price the main alternatives, and your policy documents remain the authority on what any specific policy will pay.
Frequently asked questions
How much does a short-term health plan actually save?
On premium alone, a good deal. In this page's example a $180 short-term policy against a $520 ACA plan saves $4,080 over a year, and in a quiet year with $1,500 of care the short-term route costs $3,660 against $7,740. That saving is real, and it is the whole reason these policies sell. What it buys is a narrower promise.
How long can a short-term plan last?
Under the 2024 federal final rules, published on 3 April 2024 as document 2024-06551, a short-term policy may run no more than 3 months from its original effective date, and no longer than 4 months in total once renewals or extensions are counted. A new policy from the same issuer to the same policyholder within 12 months counts as a renewal. The rule applies to policies sold or issued from 1 September 2024, and a search of federalregister.gov on 16 September 2026 found no later federal rule changing it. States set their own limits on top, and several are stricter or bar these policies outright.
What happens if I have a serious claim?
This is where the saving disappears. On a $120,000 claim the example's short-term policy leaves you paying $41,660 for the year against $15,440 on the ACA plan, so you end up $26,220 worse off. The premium saving of $4,080 does not come close to covering it. The reason is structural: after the deductible you still pay 30% coinsurance, and there is no out-of-pocket maximum to stop the bill growing.
At what size of claim does the saving disappear?
In the example, at about $33,000 of claims for the year. Below that the cheaper premium keeps the short-term policy ahead; above it the ACA plan wins and the gap widens fast. At $25,000 of claims the short-term route is still ahead, at $13,160 against $15,440; at $120,000 it is far behind.
What do short-term plans not cover?
Four things matter most. They can refuse to pay anything related to a pre-existing condition, which they may define broadly and apply retroactively. They need not cover the essential health benefits, so maternity care, mental health treatment and prescription drugs are often missing. They can cap what they will pay in total. And they carry no out-of-pocket maximum, so there is no ceiling on your share. Read the exclusions before the premium, and treat the policy document as the authority.
Can I get a premium tax credit for a short-term plan?
No. A short-term policy is not a Marketplace plan and no premium tax credit applies to it. That cuts both ways in this comparison: it means the short-term premium is the real price, and it means the ACA premium you compare it against should already be net of any credit you qualify for, which is often much lower than the sticker price.