The cheap health insurance promoted by Trump officials has this catch
The loophole for short-term plans
Short-term plans, which were previously limited to a duration of four months, were vastly expanded in 2018 by the Trump administration, which saw them as an alternative to ACA plans, which they opposed. To make the short-term plans more accessible, the Trump administration ruled that a short-term policy could last as long as three years.
“President Trump is bringing more affordable insurance options back to the market,” Health Secretary Alex Azar said at the time. “These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.”
Even some insurance companies wondered whether this relaxation of regulations was a good idea. Cigna executives raised objections to the proposed rule, worrying that consumers would end up with a cheaper short-term plan but “find themselves in need of certain benefits or protections.” Aetna suggested adding more consumer protections to the short-term plans. The largest health insurance company, UnitedHealth Group, however, recommended approval of the proposed rule “as quickly as possible.”
In the year after the rule was loosened in 2018, another 600,000 consumers turned to the policies, according to a 2020 study by congressional Democrats. While solid estimates of the total number of annual enrollees are hard to come by, they put the figure at 3 million.
Problems quickly emerged, their study said. Incentivized by larger sales bonuses, brokers were using deceptive marketing materials to sell short-term policies, the report said. It “is unclear what kind of value consumers are getting for their premium dollars,” it said, “other than a false sense of security.”
Last year, debate erupted again when the Biden administration reversed the Trump rule and restored the four-month limit on the policies. This year, though, the Trump administration announced it was again coming up with its own definition of “short-term” and would not prioritize enforcement of the Biden-era rule.
In comments for this article, the Centers for Medicare and Medicaid Services said in a statement that the short-term plans can play “a crucial role in offering stopgap coverage solutions ... and can be significantly cheaper than ACA coverage.” The agency also noted that the administration has sought to expand access to “catastrophic” health plans, a form of ACA coverage with high deductibles but lower premiums that had been limited by age and income. In 2025, 54,000 people enrolled in them, according to researchers.
In a statement for this article, UnitedHealthcare said, “Short-term plans are designed to meet consumer demand for more flexible, low-cost options, but they are not for everyone. We encourage people to make informed decisions about their health insurance coverage and compare different types of plans.”
