By Scott Hoffman, AVP Insights & Research
Health insurance companies, along with consumers and employers, have been preparing for how a new Trump administration could affect various health insurance products.
A wide range of products – from individual health plans offered through the Affordable Care Act to alternative health insurance options like Short Term Medical – could be affected by federal legislation throughout the remainder of 2025.
In this edition of Competiscan Commentary, our team highlights several products that have already been influenced by recent federal legislative changes – or are likely to be impacted in the near future.
The future of the Affordable Care Act
A key component of the Affordable Care Act aimed at keeping health plans affordable has been the availability of subsidies. With these subsidies set to expire at the end of the year – and no definitive plans in place for an extension – we are already seeing shifts in the market. The industry is preparing for the possibility that subsidies may not be renewed, with carriers like Oscar urging producers to contact Congress and advocate for action.
Carriers more closely aligned with supplemental health benefits have leveraged the potential disruption of ACA benefits and subsidies to position their products as viable alternatives for producers to offer their clients. We have started to see indications that several of these carriers are preparing producers for potential changes by encouraging them to consider offering supplemental coverage options to impacted customers.
Positioning Short Term Medical as a viable alternative to traditional health insurance
After early efforts to repeal the ACA, the Trump administration pivoted to promoting alternative health plan options aimed at lowering premiums and reducing reliance on traditional individual health plans. One such option, Short Term Medical (STM) insurance, was designed to provide limited coverage for consumers experiencing gaps – such as between jobs or after leaving school. These plans have historically appealed to healthy young adults due to their lower costs, though their limited duration has been a key drawback.
During Trump’s first term, regulations were loosened to allow longer plan durations. The Biden administration later reinstated stricter federal limits on STM plan lengths. However, the second Trump administration has reversed this policy, restoring plan duration rules to their pre – September 2024 standards. As a result, some carriers that had previously exited the STM market are now reentering the space. Pivot Health and Allstate have both actively communicated with producers about sales opportunities.
Who is eligible for Medicaid?
A key provision of the recently passed “One Big Beautiful Bill” includes the implementation of Medicaid work requirements and stricter eligibility criteria. These changes have the potential to significantly reduce Medicaid enrollment, possibly affecting millions of individuals. Despite the uncertainty, carriers have continued to issue renewal notices, as the full impact on Medicaid enrollment remains unclear. We anticipate a wave of new communications from carriers and agencies once further guidance emerges at both the state and federal levels. In the meantime, several state insurance exchanges have begun notifying consumers whose eligibility may be affected, in preparation for the upcoming ACA Open Enrollment Period.
It remains to be seen whether these sweeping changes can be implemented, but it appears likely that the health insurance landscape will be different for those who fall outside of employer sponsored coverage.