Short-term insurance offers plans designed for people in between jobs, or in need of temporary insurance until they secure a regular policy. Short-term plans are cheaper than regular insurance plans.
The new short-term insurance can only be written for three months. These plans also do not qualify as insurance under the health insurance law.
According to Clare Krusing, a representative for America’s Health Insurance Plans, “The government said these changes were necessary both to ensure that consumers have ‘meaningful health coverage’ and that the short-term plans would not siphon away healthy people from other insurance plans that comply with the ACA. An exodus of healthy people could lead to increase premiums for the remaining people in plans sold on healthcare.gov and on state sites.