Availability of short-term health insurance in Texas

Yes. As of 2024, at least six carriers offered short-term health insurance in Texas.

Short-term health plans issued or sold starting September 1, 2024 will have to comply with new federal rules: Initial terms will be capped at three months, and total duration, including renewals, will be capped at four months. These rules will apply unless a state has stricter rules, which Texas does not.

Since 1997, Texas Department of Insurance (TDI) rules have defined short-term health insurance plans as coverage that ends within 12 months of the plan effective date.

That was the same as the federal definition that was in place through the end of 2016, but federal rules that took effect in 2017 limited short-term plans to three months. As of October 2018, however, federal rules once again began to allow short-term medical plans to have initial terms of up to 364 days.

The TDI rule, allowing a short-term plan to have a term that ends within 12 months of the start date, was applicable in Texas from October 2018 through August 2024, as it aligned with the federal rules in place during those years. The Department also confirmed that renewals were allowed in line with federal guidelines during that time, which allowed for a total policy duration, including renewals, of up to 36 months.¹

Insurers are not required to offer renewals though, so that is at the discretion of each insurer. Some of the insurers that offer short-term health insurance policies in Texas have chosen to make them renewable for up to three years of total duration, while others have shorter time limits.

As noted above, policies sold or issued starting in September 2024 will have to cap initial terms at no more than three months, and total duration (if renewable) at no more than four months.

Short-term health insurance in Texas is available to individuals and families who can meet the underwriting guidelines set forth by insurers.

Most short-term policies can be purchased by people who are under 65 years old and who do not have any of the short list of medical conditions that will result in a declined application.² But the specific requirements vary from one insurance company to another.

Short-term health insurance plans typically do not cover any pre-existing conditions, and they often use post-claims underwriting. This means that if a claim is filed, the insurer can look at the person’s medical history to make sure the new claim isn’t related to a pre-existing medical condition.³

Short-term health plans also generally exclude coverage for some of the ACA’s essential health benefits (most commonly, maternity care, prescription drugs, and mental health care),² and impose dollar limits on the coverage they do provide. It’s important to double-check all of the plan information before purchasing a short-term policy, to make sure that you understand the limitations of the plan.

If you’re in need of health insurance coverage in the Lone Star State, you should first check if you’re eligible to buy an ACA-compliant plan. These plans are available (regardless of medical history) during open enrollment or during a special enrollment period due to a qualifying life event.

ACA-compliant major medical plan (ie, Obamacare plans) will cover essential health benefits and pre-existing conditions. These plans are purchased on a month-to-month basis, so you can enroll in one — with a premium subsidy if you’re eligible — even if you’re only going to need coverage for a few months before another policy takes effect.

From Amarillo to Brownsville, there may be times when a short-term health insurance plan is your only realistic option, such as:

• If you missed the open enrollment period for ACA-compliant (Obamacare) coverage and do not have a qualifying event that would trigger a special enrollment period.
• If you’re newly employed and have a waiting period of up to three months before you can enroll in your employer’s health plan (if you also have a qualifying event, you can instead enroll in a health plan through the Texas marketplace while you wait for your new employer’s insurance coverage to start; if not, a short-term policy may be your best option).
• If you’ll soon be eligible for Medicare, and need coverage for just a short while until you reach age 65 and are enrolled in Medicare. Note that while Medicare covers pre-existing conditions right away, Medigap insurers can require pre-existing condition waiting periods if an enrollee didn’t have coverage for their pre-existing conditions prior to enrolling in Medicare.
• If you’re not eligible for Medicaid (based on your monthly income) or a premium subsidy (based on your annual income) in the exchange, the monthly premiums for an ACA-compliant plan might be unaffordable. Texas does have a coverage gap, due to the state’s refusal to expand Medicaid under the ACA (learn more about how to avoid the coverage gap). But subsidies in the exchange/marketplace are larger and more widely available than they used to be, thanks to the American Rescue Plan and Inflation Reduction Act. This will continue to be the case at least through 2025.

The Texas Department of Insurance (TDI) confirmed that the state’s mandated benefits for individual major medical policies also apply to short-term health insurance plans. The mandated benefits can be found starting on page 5 of the state’s individual major medical checklist for insurers.