A catastrophic health insurance plan is a type of low-cost, high-deductible health insurance designed primarily to protect against severe or critical medical emergencies. It offers coverage for essential health benefits, including preventive services like annual check-ups, vaccinations, and certain forms of birth control, typically covering these preventive services at 100% even before the deductible is met
Who Qualifies for a Catastrophic Plan?
- Individuals under 30 years old.
- Adults of any age who qualify for a government-approved hardship or affordability exemption. Hardship exemptions apply to people facing significant life challenges such as homelessness, bankruptcy, domestic violence, eviction, or natural disasters. Affordability exemptions apply if the lowest-cost health insurance available to you costs more than about 7.97% of your household income
What Does a Catastrophic Plan Cover?
- The same 10 essential health benefits as other Marketplace plans, including:
- Emergency services
- Hospitalization
- Outpatient care
- Laboratory services
- Prescription drugs
- Mental health and substance use disorder services
- Rehabilitative and habilitative services
- Pediatric services (including oral and vision care)
- Pregnancy, maternity, and newborn care
- Preventive and wellness services and chronic disease management
- Preventive care is covered at 100%, regardless of whether the deductible has been met.
- Typically covers at least three primary care visits before the deductible is met
What Does It Not Cover?
- Emergency and other medical care costs are not covered until you meet the high deductible, which can be very substantial (e.g., $9,200 for an individual in 2025)
- After meeting the deductible, the plan pays for covered services, but until then, you pay out-of-pocket.
- There may be limits on the number of covered preventive or primary care visits depending on the specific plan
Summary
Catastrophic plans offer low monthly premiums but come with very high deductibles and out-of-pocket maximums. They are best suited for generally healthy individuals who want protection against worst-case medical scenarios but do not expect to use much healthcare regularly. These plans do not qualify for premium tax credits, so some people may find better value in other Marketplace plans if they qualify for subsidies
. In essence, catastrophic health insurance acts as a financial safety net for unexpected, major medical expenses while providing free preventive care, but it requires paying most routine and emergency costs out-of-pocket until the deductible is met
