Short-Term Major Medical Plans: What to Know as ACA Subsidies Go Away

or many individuals and families, Affordable Care Act (ACA) subsidies have made health insurance significantly more affordable over the past few years. However, as income changes or temporary subsidy expansions expire, some people are now facing much higher monthly premiums.

If you’re losing your ACA subsidy—or seeing it reduced—you may be wondering what your options are. One alternative that often comes up is short-term major medical insurance.

Short-term plans aren’t right for everyone, but in certain situations, they can provide temporary, lower-cost coverage while you explore long-term solutions.

What Are Short-Term Major Medical Plans?

Short-term major medical plans are health insurance policies designed to provide temporary coverage, typically ranging from 30 days up to 36 months, depending on state regulations.

These plans are intended to:

• Fill coverage gaps

• Provide protection during transitions (job changes, early retirement, waiting for employer coverage)

• Offer a more affordable option when ACA premiums become too expensive

Unlike ACA plans, short-term plans are not required to meet all ACA standards, which is why they often cost less.

When ACA subsidies go away, monthly premiums can jump dramatically—sometimes doubling or tripling overnight. Short-term plans may appeal because:

• Lower monthly premiums

• Quick enrollment (often effective as soon as the next day)

• Nationwide provider networks (depending on the plan)

• Protection against large, unexpected medical bills

For healthy individuals who mainly want coverage for serious illness or accidents, short-term insurance can act as a financial safety net.

It’s important to understand how these plans differ before making a decision.

ACA Health Insurance Plans

• Guaranteed acceptance (no medical underwriting)

• Covers pre-existing conditions

• Includes essential health benefits

• Eligible for subsidies (if income qualifies)

• Higher premiums without subsidies

Short-Term Major Medical Plans

• Medical underwriting required

• Pre-existing conditions are not covered

• Limited benefits and exclusions apply

• No subsidies available

• Typically much lower premiums

Short-term major medical insurance may make sense if you:

• Are losing ACA subsidies and can’t afford the new premium

• Are generally healthy with no major ongoing conditions

• Need coverage for a short period of time

• Are between jobs or waiting for employer-sponsored insurance

• Missed Open Enrollment and don’t qualify for a Special Enrollment Period

Losing an ACA subsidy doesn’t mean you’re out of options. Short-term major medical plans can be a strategic, temporary solution for the right person—but they should be chosen carefully.

Comparing ACA plans, short-term plans, and other alternatives ensures you’re making an informed decision based on your health needs and budget.

If your subsidy is going away or your premium is increasing, now is the time to review your coverage and avoid gaps that could lead to costly surprises.

Call Pierce Insurance today to help you make the decision!