Short-Term Health Insurance in New York: Why You Can't Buy It and What to Use Instead

Why short-term plans are not sold in New York

Short-term limited duration insurance is the product sold in many states to bridge a gap: a few months of coverage, a low price, and in exchange no coverage for pre-existing conditions, benefit caps and medical questions before you are accepted. New York does not allow it.

The Department of Financial Services (DFS) set the rule out in Circular Letter No. 7 of 2018: short-term limited duration plans are prohibited in the individual and group health insurance markets in New York. The letter cites five sections of the state Insurance Law and makes two points that matter to a buyer:

1. Every hospital, surgical or medical policy must be renewable at the option of the policyholder. A plan that ends on its own after a set number of months does not meet that rule.
2. New York’s coverage requirements apply regardless of how long the policy lasts. Individual and small group policies must be comprehensive and include essential health benefits. Calling a policy “short-term” does not exempt it.

DFS wrote the letter in response to a federal proposal to stretch short-term plans to just under a year, and said New York’s rules apply irrespective of federal changes. In an August 2018 press release DFS said such plans could deny coverage for pre-existing conditions, cap annual and lifetime benefits and charge sick people more, and that the ban keeps the state’s markets stable.

What you may be offered instead, and what it is

The search results for “short-term health insurance New York” are full of quote forms. What comes out of them tends to be one of three things:

The test is short. A comprehensive New York plan covers the essential health benefits, cannot turn you down for a pre-existing condition and cannot be priced on your health. If what you are shown fails any of those three, it is not a substitute for insurance, however it is named.

What to ask before you pay:

“Is this a Qualified Health Plan sold through NY State of Health, or a plan approved by the New York Department of Financial Services? What is the exact plan name and the insurer’s name?”

What to use instead, by situation

Medicaid, the Essential Plan and Child Health Plus take applications all year, according to the state Health Department. Marketplace open enrollment for 2027 runs November 1, 2026 to January 31, 2027; outside it, you need a qualifying life event.

COBRA and state continuation: up to 36 months

If you had coverage through a job, the usual bridge is to keep it. Federal COBRA allows 18 months of continuation; New York state continuation adds up to 18 more, for a total of up to 36 months, according to DFS. The extension does not depend on why you lost eligibility.

Two limits. You pay the whole premium, without the employer’s share, which is why COBRA often costs more than a marketplace plan with a tax credit. And the state extension does not apply to self-funded employer plans, or to dental-only, vision-only or prescription-only plans. Ask the employer whether your plan is insured or self-funded. COBRA or the marketplace.

Catastrophic plans: the closest legal thing to a cheap gap plan

A catastrophic plan is the one real low-premium product in New York’s market. It is comprehensive, so it covers pre-existing conditions and the essential health benefits, and HealthCare.gov describes it as including at least three primary care visits a year before the deductible, plus free preventive care. It is open to adults under 30 and to people with a hardship exemption.

The catch is the deductible. In New York’s 2027 standard catastrophic plan it is $12,000 for an individual, per the DFS cost-sharing chart, with the first three primary care visits at $0. That protects against a disaster, not against an ordinary year of care. If you qualify for the premium tax credit, a bronze or silver plan with the credit may cost you less. What insurance costs in New York in 2027.

If you are uninsured right now

Two doors stay open while you sort out insurance. NYC Care gives uninsured New Yorkers care at NYC Health + Hospitals with no membership fees, monthly fees or premiums, and fees based on family size and income. And if a hospital bill arrives before coverage starts, apply for that hospital’s financial assistance, which can be done after the bill. Hospital financial assistance.