Short-Term Health Insurance in Texas: 2027 Rules
A short-term health plan in Texas is a temporary policy meant to fill a gap of weeks or a few months, not a full replacement for major medical coverage. It can exclude pre-existing conditions, cap what it pays and decline applicants, and Texas adds its own rules on top of the federal limits. With Texas Marketplace premiums rising 13.1% to 14.1% on average for 2027, more people are looking at short-term plans, so it pays to know what they leave out. I don't sell short-term plans; this page explains how they work in Texas and the year-round options I do offer.
Private health insurance in Texas
Most people I help in Texas end up on a private plan, not a Marketplace plan. Private, medically underwritten health insurance is priced on your age, zip code and health instead of your income, so a strong year never raises your premium and there is no tax credit to pay back in April.
Why people leave the Marketplace
- Premiums keep climbing. Texas Marketplace premiums are rising 13.1% to 14.1% on average for 2027.
- The subsidy cliff. Above 400 percent of the poverty level ($63,840 for one person, $132,000 for a family of four) you pay full price.
- Surprise tax bills. Underestimate your income and you repay the tax credit in April.
- Narrow networks. Many plans are local HMOs or EPOs that need referrals and cover little outside the area.
- High out-of-pocket costs. 2027 out-of-pocket maximums reach $12,000 per person and $24,000 per family.
- One window a year. Outside open enrollment you need a qualifying life event to enroll or switch.
What a private plan does differently
- Start any month. If approved, coverage can begin the first of next month, with no wait for open enrollment.
- Networks that travel. Many private plans use national PPO networks, which can give you in-network doctors outside Texas too. Networks vary by plan.
- Can cost less than full-price Marketplace plans for some healthy applicants above the subsidy line.
- Accident coverage the Marketplace does not offer. A private plan can be paired with accident coverage, a separate policy. What it includes varies by plan.
- Approval is based on health. You answer health questions, and acceptance is not guaranteed.
With a significant health condition, or income low enough for a large tax credit, a Marketplace plan can be the better fit, and I will tell you if it is. Either way you see both side by side.
Private plans are not ACA Marketplace plans. Benefits, exclusions and pre-existing condition rules differ by plan and by state, so review the plan details before you enroll.
Get a private plan quoteLearn more: coverage not based on income · how underwriting works · private vs Obamacare · PPO plans for individuals · switching from the Marketplace
Short-term plan rules in Texas
Texas allows short-term plans and regulates them through the Texas Department of Insurance. Insurance Code Chapter 1509, added in 2019, defines the product by reference to federal regulations, and TDI rule 28 TAC section 3.3602 requires a standard disclosure explaining what these plans leave out, including conditions you had before enrolling. Some summaries describe Texas limits as an initial term under 12 months and 36 months total, yet TDI's October 2025 consumer alert still described short-term plans as lasting three months or less, matching the 2024 federal rule. The federal departments said in August 2025 they would not prioritize enforcing that rule. healthinsurance.org found most Texas plans in early 2026 running three to four months, though at least one carrier offered 12-month terms. State-mandated benefits may also apply.
When a short-term plan fits in Texas, and what to use instead
A short-term policy in Texas can bridge a few weeks between a construction or oil-field contract and a staff job, or the waiting period before a Houston or Dallas employer's plan begins. It is underwritten at application, excludes conditions you already have, isn't ACA coverage, and receives no subsidy. Texas uses HealthCare.gov for its Marketplace; losing coverage triggers a 60-day special enrollment window there, and income-based savings may apply. If you'd rather not depend on a policy that may only last three months, a medically underwritten private plan can be applied for in any month and, if approved, can take effect the first of the next month. Frank can compare the options available in your county.
The Texas individual market
Texas buyers use HealthCare.gov, and the state has the second-largest Marketplace in the country with about 15 insurers filing for 2027. Texas requires insured group plans to offer state continuation, nine months for people without COBRA rights and six more months after COBRA ends, at the group rate plus 2 percent, though self-funded employer plans are exempt. Texas defines short-term plans by the federal rule rather than its own limit. Final 2027 individual increases average about 13 to 14 percent, with small-group plans up about 17 percent, which makes individual coverage reimbursement worth a look for small Texas employers.
Other Texas rules to know
- Leaving a small employer: Texas requires insured group plans to offer state continuation for up to nine months to people not eligible for COBRA, or six more months after COBRA ends, at the group rate plus 2 percent. It does not apply to self-funded employer plans.
- Short-term plans: Texas defines short-term plans by reference to the federal rules, which set a three-month initial term and four months in total; federal agencies are not prioritizing enforcement of that limit while new rules are written.
- Where to enroll: Texas uses HealthCare.gov. Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027. Private, medically underwritten plans can start the first of any month if approved.
- 2027 rates: individual plans 13.1% to 14.1% on average, small-group plans about 16.9%. See the Texas 2027 rate page.
What a short-term plan is
Short-term limited-duration insurance is temporary coverage outside the ACA rules. It can ask health questions, turn applicants down, exclude conditions you already have and leave out benefits such as maternity care, mental health care or prescriptions. It is not Marketplace coverage, so no subsidy applies to it.
Why the time limit matters
A 2024 federal rule caps short-term plans at three months, or four with renewals. In August 2025 federal regulators said they would not prioritize enforcing that cap, so the real limit now depends on your state, from a few months to as long as three years. However long it lasts, when the plan ends you are not guaranteed a new one, and losing a short-term plan does not open a Marketplace enrollment window.
The two options that last all year
A Marketplace plan accepts everyone during open enrollment or within 60 days of losing other coverage. A medically underwritten private plan is year-round coverage priced on age, ZIP code and health; it is not a Marketplace plan, approval depends on your health answers, benefits vary by plan, and if approved it can start the first of a month. For most people who need more than a short bridge, one of these two is the better fit.
For 2027 the Marketplace credit stops at 400 percent of the poverty level: $63,840 for one person, $86,560 for two and $132,000 for a family of four. The out-of-pocket maximum for 2027 Marketplace plans is $12,000 for one person and $24,000 for a family. The full guide covers the rest.
Compare Texas plans
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Texas questions
Where do Texas residents enroll in 2027 coverage?
Texas uses HealthCare.gov. Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027.
What continuation rights does Texas give after leaving a small employer?
Texas requires insured group plans to offer state continuation for up to nine months to people not eligible for COBRA, or six more months after COBRA ends, at the group rate plus 2 percent. It does not apply to self-funded employer plans.
How much are Texas premiums rising for 2027?
Individual-market premiums are set to rise 13.1% to 14.1% on average, and small-group plans about 16.9%.
Is a short-term plan cheaper than a Marketplace plan?
The premium often is, but the plan covers less, can exclude pre-existing conditions and ends after a few months. Compare it with what you would actually pay for care under each option.
Can I get a short-term plan after open enrollment ends?
Where your state allows them, yes, but they are temporary. A year-round private plan can also be applied for in any month and, if approved, can start the first of a month.
Sources: www.tdi.texas.gov, www.tdi.texas.gov, www.healthinsurance.org. Facts checked October 2026. See all Texas health insurance rules.
Short-term plans in other states
Written by Frank Caballero, licensed health insurance agent in Texas and 30 other states, NPN 21032307.