Pros of a Short-Term Medical Plan
Price and Immediate Enrollment
The most significant draw of short-term insurance in 2026 is the price. For those who do not qualify for subsidies, an STM premium can be one-fourth the cost of an ACA plan. These prices are reminiscent of the “catastrophic” plans offered a decade ago.
Additionally, short-term plans have no enrollment period. While the ACA limits you to Open Enrollment (Nov 1 – Jan 15) or a Special Enrollment Period (SEP), you can apply for a short-term plan 365 days a year.
Provider Access
Many short-term plans offer access to expansive PPO networks. Unlike many entry-level ACA plans that may limit you to a local HMO network, STM plans often allow you to see hundreds of thousands of providers nationwide, making it easier to find a specialist in your area.
Cons of a Short-Term Medical Plan
Pre-Existing Conditions and Underwriting
The primary drawback of short-term medical is its approach to pre-existing conditions. These plans will not pay for health issues you had before the plan started. Depending on your state, insurers may look back 6 to 12 months into your medical history to determine what is excluded.
Furthermore, these plans use medical underwriting. You will be asked a series of health questions; while the process is fast (often just 5 questions), a “yes” answer to certain conditions can lead to a denial of coverage.
4-Month Policy Limits
In previous years, you could buy short-term medical for 12 months at a time. However, federal regulations for 2026 strictly limit these plans to an initial 3-month term with a maximum total duration of 4 months. These are now intended strictly as a “bridge” between permanent policies, not a year-round alternative.
The Tax Penalty Myth
A common point of confusion is the “tax penalty.” There is no federal tax penalty in 2026 for choosing a short-term plan over an ACA plan. The federal mandate was reduced to $0 years ago.
Note: While the federal penalty is gone, a few states (like CA, NJ, and MA) have their own state-level mandates. Check with your agent to see if your specific state has its own requirements.
Which Plan Is Right for You?
Both short-term and ACA plans serve a purpose. If you are healthy and need a 90-day safety net while transitioning between jobs, a short-term plan is a budget-friendly lifesaver. However, if you have ongoing health needs or want permanent, year-round security, the ACA remains the gold standard.
Have Health Insurance Questions?
We hope this information helps you understand short term medical and that it was useful to you.
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This article was updated on February 13, 2026.