CaliToday (16/11/2025): As enhanced ACA subsidies expire, millions of Americans seeking affordable coverage are walking into a financial trap set by "junk" insurance plans that cover very little.
Robert Hays, an industrial electronics salesman in Arkansas, thought he had purchased real medical insurance. So did Essie Nath, 67, a retired cafeteria worker in Wyoming, and Martin Liz, 47, a chef in Key West.
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| The cheap health insurance promoted by Trump officials has this catch |
All three had enrolled in the type of private, "short-term" health insurance that Trump administration officials have championed as a common-sense, affordable alternative to Obamacare.
The devastating difference between the two options became clear only after they needed care.
After tweaking his neck while lifting weights, Robert Hays required surgery. He now faces $116,000 in bills.
After suffering heart failure, Essie Nath was left with $82,000 in medical debt.
After a knee replacement, Martin Liz is stuck with bills totaling more than $100,000.
“These policies are a horrible idea,” said Ken Swindle, an Arkansas-based attorney for Hays. “People think they’re getting comprehensive medical coverage, but they’re not, and they often don’t realize that until it’s too late.”
Their stories serve as a critical warning. With enhanced government subsidies for Affordable Care Act (ACA) plans expiring this year, millions of Americans are facing soaring insurance costs. In their search for relief, many are expected to turn to the very "short-term" plans that left Hays, Nath, and Liz in financial ruin.
The "Junk Plan" Trap
Unlike plans sold on HealthCare.gov, these policies which the Biden administration labeled "junk" plans—are not required to follow ACA rules. They are notorious for their coverage gaps:
They can deny coverage for preexisting conditions.
They often exclude basic needs like maternity care, mental health services, and outpatient prescription drugs.
According to KFF, a nonpartisan health policy research group, the coverage is so full of holes that five states, including California and New York, have banned their sale entirely, and nine others have rules so prohibitive that no plans are offered.
The catch? They are cheap. A short-term plan can cost as little as half as much as an ACA plan. In Florida, a 40-year-old nonsmoker might pay $500 a month for the cheapest ACA plan, while a short-term plan is advertised for $320. Millions have already signed up.
A New Crisis as Costs Soar
Insurance agents say the looming premium hikes for 2026 are driving a new wave of desperate consumers.
“Costs continue to go up, leaving individuals, families, and businesses scrambling to find and keep the coverage they need,” said Kelly Loussedes, vice president of NABIP, a trade group for insurance agents. “It’s essential that consumers understand these plans are not comprehensive coverage.”
Andy Mided, a national health insurance agent in the Chicago area, said he has been "flooded" with calls from current Obamacare enrollees looking for a cheaper way out.
“There’s been a huge influx of people asking me, ‘What do I do?’” he said.
Mided refuses to sell them the short-term plans, calling them too risky. “Given their gaps in coverage," he said, "I couldn’t sleep at night if I sold that to somebody.”
A Political Tug-of-War
These plans were once limited to a four-month duration, intended only as temporary stopgaps.
In 2018, the Trump administration, seeing them as an alternative to an ACA market it opposed, "vastly expanded" the rules, allowing a single policy to last for up to three years.
“President Trump is bringing more affordable insurance options back to the market,” then-Health Secretary Alex Azar said at the time. "They can provide a much more affordable option for millions of the forgotten men and women."
The move was controversial even within the industry. Cigna executives warned that consumers would “find themselves in need of certain benefits." But UnitedHealth Group, the nation’s largest insurer, urged the administration to approve the rule "as quickly as possible."
Last year, the Biden administration reversed the rule, restoring the four-month limit. This year, however, the Trump administration announced it would not prioritize enforcement of the Biden-era rule, effectively reopening the door.
In a statement, the Centers for Medicare and Medicaid Services (CMS) said the plans play "a crucial role in offering stopgap coverage solutions."
"Reward Your Hustle"
Some insurers are preparing for a sales boom. Last month, UnitedHealth and its subsidiary, Golden Rule Insurance, announced new sales incentives to agents selling the plans.
“This fall, we are celebrating ... with a high-impact incentive designed to reward your hustle,” the announcement to agents said.
Critics say that "hustle" is precisely what leads to devastating outcomes, like that of Robert Hays.
In May 2023, Hays bought a short-term policy from Golden Rule. Months later, after losing feeling in his fingers, doctors said he needed spinal surgery to avoid paralysis. Hays said he even got "prior authorization" from the insurer.
But after the surgery, the denials began. The insurer claimed his neck problem was "pre-existing" from a previous car accident a claim his doctor disputes.
“It just threw me completely,” Hays said. “How did they give pre-authorization and then they’re telling me none of this is going to be covered?”
He is now suing to force payment. In court filings, Golden Rule has denied the allegations, reminding the court that policy paperwork highlights the exclusion of preexisting conditions.
Martin Liz, the Key West chef, faces a similar fight. He had short-term policies for years. In 2020, he bought a three-year plan. In 2023, after surgeons replaced his left knee for over $100,000, his insurer, National Health Insurance, refused to pay. The company cited its right to cut off coverage in cases of “fraud or intentional misrepresentation.”
“They’re saying I didn’t tell them I needed a knee replacement, when I told the agent that multiple times,” Liz said. “I called the insurance company, and they assured me it would be taken care of.”
Now, he is suing while staring down a mountain of debt.
“It’s a very distressing situation,” Liz said. “It’s a lot of debt.”