Whether you are purchasing health insurance for the first time or switching policies, navigating the current market can be overwhelming. The big news this year is the expiration of enhanced federal subsidies, which have caused ACA premiums to spike for many families.
Short-Term Health Insurance: A Temporary Solution
Looking at short-term insurance can be very attractive considering how low their premium payments are, but short-term health insurance plans have some major drawbacks. Among these are very high deductibles, which lead to large out-of-pocket payments and limited coverage in general on essential services.
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Lower Premiums, Higher Out-of-Pocket: While the monthly bill is smaller, these plans often come with high deductibles. This means you may pay more out-of-pocket before the insurance company begins to cover costs.
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Limited Coverage: Short-term plans do not have to follow ACA regulations. They often exclude coverage for “essential” services like maternity care, mental health, and prescription drugs.
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Medical Underwriting: Since they aren’t ACA-regulated, these plans can deny coverage for pre-existing conditions or charge you a higher premium based on your health history.
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Flexibility: On the plus side, you can sign up 365 days a year with almost immediate coverage. These are ideal for bridging gaps—such as being between jobs or waiting for a permanent policy to start.
Affordable Care Act Plans
The Affordable Care Act plans are required to cover the 10 essential health benefits and must provide coverage to people with preexisting conditions. These plans are permanent health insurance options that can last much longer than the 1-12 months of most short-term health plans.
ACA plans (often called “Marketplace” plans) are designed for long-term, comprehensive security.
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The 2026 Subsidy Shift: The “enhanced” subsidies that kept premiums at record lows have expired. While many people still qualify for standard tax credits, those with middle-to-high incomes may see a significant increase in their monthly costs this year.
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Enrollment Windows: Unlike short-term plans, you can generally only enroll in an ACA plan during Open Enrollment (Nov 1 – Jan 15) or during a Special Enrollment Period if you have a life event like marriage or losing a job.
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Financial Protection: ACA plans include a legal “Out-of-Pocket Maximum” ($10,600 for individuals in 2026), ensuring you are protected from unlimited medical debt.
Which Plan Should You Choose?
ACA plans offer the best protection for your health and long-term finances. However, if the recent subsidy changes have priced you out of the Marketplace, or if you simply need a bridge for a few months, a short-term plan can serve as a vital safety net for catastrophic events.
Have Health Insurance Questions?
We hope that this information on short-term health insurance vs. ACA health insurance is helpful for you.
Insurance is oftentimes overwhelming and we want to shed light on the industry by answering your questions. Comment below and your question may be the topic of our next post!
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This article was updated on February 13, 2026.