Health insurance rates for short term health insurance are generally lower because short term health insurance is for temporary use.
Short term health insurance is generally used when someone is in between jobs or just starting out in the job market; for example recent graduates, starting their first jobs.
When someone starts a new job they will generally have a waiting period before the group coverage starts – so short term health insurance would fill in that gap. If they have a family sometimes they cannot wait the 90 days or so for the group health insurance plan to start, short term health insurnce would fill in that gap.
Short term health insurance plans provides coverages for a limited period of time. The duration of the policy can be from one to twelve months. If you need coverage longer than twelve months you may be better off with a standard health insurance policy vs a short term health insurance policy. The health insurance rates in a short term health insurance plan may be higher if you need coverage longer than twelve months.