Short answer: Short-term limited-duration insurance is temporary coverage meant to fill brief gaps. Under the 2024 federal rule, new plans are limited to a 3-month initial term and 4 months total including renewals. They can exclude pre-existing conditions and need not cover essential health benefits.
Short-term limited-duration insurance (STLDI) is designed to bridge a temporary gap in coverage, for example, between jobs or while waiting for other coverage to start. It is not ACA-compliant: short-term plans can deny coverage or charge more based on health history, exclude pre-existing conditions, and skip essential health benefits like maternity care, prescription drugs, and mental health services.
Under the federal rule that applies to plans sold or issued on or after September 1, 2024, a new short-term policy is limited to an initial term of no more than 3 months and a maximum total duration of no more than 4 months, counting any renewals or extensions from the same insurer. Plans issued before that date may follow the prior, longer rules. Some states impose stricter limits or ban these plans outright.
A short-term plan can cost less and provide some protection during a brief gap, but read the exclusions carefully, since it may not cover a serious illness or a pre-existing condition. If you qualify for a special enrollment period, an ACA marketplace plan (possibly with subsidies) is usually more complete.