Short-Term Medical insurance has been on a regulatory rollercoaster for the better part of a decade. Every administration rewrites the rules, every state legislature reacts, and the result is a patchwork of duration caps that determine whether STM is a long-term answer for you or a four-month bandage.
For 2026, the federal default swung back to the longer end. But where you live still matters more than the federal rule. Here’s the current map.
The federal default: 12 months renewable, up to 36 months total
The Trump-era federal rule that defines STM as “12 months initial term, renewable up to 36 months total” is the law of the land again. The Biden-era 2024 rule that capped STM at 4 months total was reversed under the current administration. So unless your state has a stricter cap, you can buy an STM plan with a 12-month initial term and renew it up to 36 months.
This is a big deal for one specific group: healthy people whose household income puts them above the ACA subsidy cliff (about $62,600 single / $128,600 family of four for 2026 coverage). For that group, a 3-year STM plan is often the most affordable major medical coverage available — sometimes 40–60% less than an unsubsidized ACA Marketplace premium for the same person.
What your state actually allows
States can — and many do — set their own caps below the federal default. Here’s how the 36 states we serve break down for 2026:
12 months renewable up to 36 months total (matches the federal default): AL, AR, AZ, DE, GA, IA, ID, IN, KY, LA, MN, MO, MS, MT, NE, NH, OH, PA, SC, SD, TN, UT, WV.
6 months max: CT, IL, NC, TX, VA.
3 months max: MD, OR, VT.
Banned entirely: CA, NM, WA.
Florida is its own case — state legislation in 2024 specifically allowed 3-year STM plans, making it one of several states with the longest available STM durations.
If you’re in a state that follows the federal default, you have access to the full 36 months. In a 6-month state, you’re looking at renewing every six months, which usually means a fresh health-questionnaire pass each time. In a 3-month state, STM functions much more like the bridge coverage the industry usually describes. In CA, NM, and WA, it isn’t an option at all, and Fixed Benefit / Indemnity coverage is your private-market alternative.
Why the 3-year window matters
The math on STM works when three things line up:
- You’re healthy enough to pass underwriting. STM is underwritten — the carrier asks health questions, and pre-existing conditions are excluded during the policy term.
- Your household income is above the ACA subsidy line. If you qualify for an ACA subsidy, that almost always wins on price.
- You live in a state where the duration is long enough to make it a real solution, not a stopgap.
When all three line up, a 3-year STM plan can save a healthy 45-year-old self-employed person several thousand dollars a year compared to an unsubsidized ACA plan, with deductibles you can pick ($2,500 / $5,000 / $7,500 / $10,000, or higher) and real major medical coverage.
The trade is real and we’ll never hide it: STM does not cover pre-existing conditions, and at renewal, the new policy can exclude any condition diagnosed during the prior term. Your safety net is the ACA Marketplace, which can’t decline you for any pre-existing condition during Open Enrollment. The smart play for healthy, above-the-cliff households is: STM while healthy + ACA as your fallback if your health changes.
When STM isn’t an option — what’s next
If you live in California, New Mexico, or Washington, STM is off the table. The same is true if you can’t pass underwriting. In those cases, the next-best private-market move is usually Fixed Benefit / Indemnity coverage.
Fixed Benefit plans pay you a set cash amount when specific medical events happen — daily hospital admission, ICU stays, surgery, ER visits. Robust plans on this side pay providers directly when in-network. They aren’t a replacement for major medical, but they pair well with a high-deductible ACA Bronze plan. The Bronze plan handles catastrophic and pre-existing protection; the Fixed Benefit gives you cash to cover the deductible if you get hospitalized.
In a 3-month or 6-month STM state, the same Bronze + Fixed Benefit stack often beats short-cycle STM renewals on both price and predictability.
What this means for you
The right question isn’t “should I get STM?” It’s “given my income, my state, and my health, what’s the best combination of products for the next three years?”
For a healthy household above the subsidy cliff in a 36-month state, STM is often the answer. For the same household in a 3-month state, it’s probably a Bronze ACA plus Fixed Benefit stack. For someone with a chronic condition, ACA wins almost every time. For someone bridging to Medicare, STM is purpose-built for that gap if your state allows it.
A 30-minute Healthcare Review walks through your actual situation — income, health, state, household — and lays out the real options. We pull live quotes, run the math, and tell you what we’d do in your shoes. If your current plan is the right answer, we’ll say that too.
Book a Healthcare Review: https://calendar.app.google/SLAptEH3ZSyY5k2r9
Craig Gruenbaum, COO, Insured American Family
