On August 7, 2025, the Departments of Labor, Health and Human Services, and the Treasury put out a statement about short-term health insurance. They basically said they aren’t going to prioritize enforcing the 2024 rules that shortened how long these plans could last and added extra notice requirements. That pause gives insurers and states more flexibility while the agencies review the regulations under a deregulatory executive order.
The timing is important because the “One Big Beautiful Bill” has now confirmed that the expanded Affordable Care Act subsidies are ending at the close of 2025. Those subsidies made marketplace coverage affordable for millions of people, in some cases reducing premiums down to zero. Without them, premiums are expected to jump dramatically, and experts predict millions of Americans could lose coverage if nothing changes.
This creates a strange moment in the health insurance market. On one side, ACA plans are about to get more expensive for a lot of people. On the other side, short-term health plans are being given breathing room to operate for longer durations in many states. For people who don’t qualify for subsidies or who lose them after 2025, short-term medical might start to look like the only way to keep some kind of coverage in place. These plans are usually much cheaper than unsubsidized ACA coverage, they can start almost immediately, and in many states they can last close to a year or even be renewed. For someone between jobs, waiting for new employer benefits, or retiring early without Medicare, that kind of flexibility is appealing.
But the drawbacks are real. Short-term medical plans don’t cover pre-existing conditions. They often exclude maternity care, prescription drugs, mental health treatment, and preventive services. The benefits are limited, which means if you end up needing significant medical care, you might face big bills. Coverage rules vary state to state too, which can add to the confusion.
What this all means is that in 2026, short-term medical will likely play a bigger role. For healthy people who need something to tide them over, it may be a useful bridge. For families with ongoing medical needs, the loss of ACA subsidies paired with the limits of short-term plans could leave them exposed.
The takeaway is simple. If you qualify for subsidies through the end of 2025, stick with ACA coverage while it’s still affordable. After that, take a hard look at your options. Short-term medical might not be perfect, but for some, it could be the only realistic path to keeping coverage in place during a period of higher costs and uncertainty.
Exploring your options? Landsman Insurance Services can walk you through the choices and guide you with confidence.