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Buyer Beware: "Junk" Health Plans in 2025

What are "Junk" Health Plans? 

  • "Junk" health plans are forms of coverage that don’t have to comply with Affordable Care Act (ACA) standards for benefits covered or financial protection. They include short-term limited duration health plans, association health plans, health sharing ministries and Farm Bureau plans.
  • "Junk" plans are heavily advertised and  often show up as some of the top results if you enter “health insurance” into a general internet search engine.  
  • They often have premiums much lower than ACA health plans — but they are less expensive because the coverage is much more limited. They may not cover prescription drugs, specialist visits, inpatient hospital stays, mental health or substance abuse treatment or maternity care.
  • "Junk" plans almost always limit how much they will pay in benefits. If you have a serious illness or accident, you could hit that limit very quickly and be stuck having to pay enormous medical bills entirely out-of-pocket. Think about whether or not you can afford those costs.
  • By contrast, "junk" health plans generally do not cap how much you may have to pay out-of-pocket for your care. "Junk" health plans can leave you dangerously under-insured against illness or accidental injury.
  • "Junk" plans are not required to cover everyone. If you have a preexisting condition, a "junk" plan may be able to turn you down outright, or it may charge you more for coverage based on your health status.
  • The federal rules governing short-term limited duration health plans changed in 2024. Under 2018 rules, short-term health plans could last for up to 12 months and could be renewed for a maximum period of 36 months. However, the 2024 rule reverts to the (pre-2018) standard that short-term plans can only be written for periods up to 3 months (plus a 1-month renewal), and short-term plan issuers must disclose how these arrangements differ from ACA-compliant coverage. The new rule ensures that short-term plans will be used as they were originally intended: as stop-gap coverage while consumers are between other plans, and not as an alternative to traditional health insurance.

How can I avoid unintentionally ending up in a "junk" plan?

Start your search at www.healthcare.gov. All plans listed there are ACA-compliant, meaning they cover essential health benefits and include financial protection against unlimited out-of-pocket costs. What’s more, premium subsidies and cost-sharing reductions are only available for health plans sold on the ACA Marketplaces

Questions to consider include:

If you have a pre-existing condition, a “junk” plan can deny you coverage, charge you a higher premium because of that condition, or completely exclude that condition from coverage. The lower monthly premiums of a “junk” plan may not help you save money because you may pay more out of pocket for all the things the plan does not cover.

No one can predict the future, but your past medical visits and bills are a place to start. They will give you an idea of the medical services you might need going forward. Plus, if you know of anything coming up that will impact your health, be sure to consider that as well. The important thing is to come up with a ballpark of expected needs. Even if you only expect a moderate amount of needed healthcare in the coming year, a “junk” plan could leave you responsible for most of your medical bills. And remember, if you have previously been treated for an illness or accident, any treatment related to that illness or accident will probably not be covered at all.

Many “junk” plans do not have a network of contracted doctors or hospitals (providers). Although this means you can choose any provider you want, it also means you will pay significantly more for the treatment you need.

Routine benefits are the things that are going to come up whether you planned for them or not, like preventive care and well care (annual checkups, lab tests and vaccinations), prescriptions and maternity and newborn care. When talking about ACA-compliant plans, these are often called essential health benefits and they must be covered. “Junk” plans do not have to cover these common benefits.

Do you take maintenance medications regularly for conditions like asthma, COPD or other chronic conditions? Do you expect to have any kind of medical procedure in the coming year for which prescription medications would be part of the recovery process, like pain medications or antibiotics? 

Filling prescriptions is the most common interaction people have with their health insurance, so it makes sense to understand how prescription coverage works for any plan you are considering. It is best to look at how the plan covers prescriptions in general in addition to knowing how your specific prescription medications would be covered.

Prescription drugs are not required to be covered by "junk"  plans. They are also not required to cover treatments for pre-existing conditions, which for many might include prescriptions


Consumers should also check what financial assistance for comprehensive coverage they might qualify for at HealthCare.gov before making any decisions.

Kaiser Family Foundation www.kff.org

Page last updated: October 8, 2024

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