Understanding What Catastrophic Health Insurance Covers

Catastrophic health insurance is designed to provide financial protection against extremely high medical bills, typically for individuals under the age of 30 or those who are exempt from other health insurance requirements.

These plans usually have lower premiums but higher out-of-pocket costs, which can be a challenge for those who need regular medical care.

In fact, catastrophic plans often have limited coverage for routine doctor visits, prescriptions, and other essential healthcare services, which can be a concern for individuals with ongoing health needs.

However, they do cover essential health benefits, such as emergency room visits, hospitalizations, and surgeries, which is crucial for unexpected medical expenses.

Catastrophic health insurance plans cover a range of essential health benefits, including preventive services like health screenings and vaccinations, as well as certain forms of birth control.

These plans provide 100% coverage for certain preventive care services like annual check-ups, flu shots, and routine screenings after you meet your plan deductible.

Catastrophic plans cover all of the essential benefits defined by the ACA, including ambulatory patient services, emergency services, hospitalizations, laboratory services, and more.

Some of the essential health benefits covered by catastrophic plans include:

Catastrophic plans also cover up to three primary care visits per year before the deductible is met, with copays applying to these visits.

Your catastrophic health plan doesn't cover emergency care until you've met your deductible. This means you'll need to pay for some medical expenses out of pocket before your insurance kicks in.

There may be certain limits on preventive care, such as the number of health screenings or vaccinations you can get each year.

Catastrophic health insurance plans are available to people under 30 or those who qualify for a hardship/affordability exemption. This exemption is available to individuals who experience economic hardship, certain hardships, or unaffordability of coverage.

The average monthly cost for a catastrophic health plan varies by age, with a 30-year-old paying $282, and a 50-year-old paying $443. Catastrophic plans have low monthly premiums but high deductibles, which can be a significant financial burden.

To qualify for a catastrophic plan, you must meet specific eligibility requirements, such as experiencing a financial hardship or being under 30. A financial hardship exemption is available to individuals who face life situations such as homelessness, eviction, or foreclosure.

Here are some average monthly costs for catastrophic health plans by age:

The cost of catastrophic health insurance varies depending on your age and location. The average monthly cost for a 30-year-old is $282, which is significantly lower than traditional health insurance plans.

Catastrophic health plans have low premiums, but they come with high deductibles. For example, the annual deductible for covered services in 2024 is $9,450 for an individual.

If you're under 30 or meet hardship requirements, catastrophic health insurance may be a low-cost option. However, it's essential to consider that you'll typically pay out of your own pocket for routine medical care.

The average monthly premium for a 27-year-old is $260, while it's $443 for a 50-year-old. These costs can vary based on your location and whether you sign up for a plan on a public or private exchange.

Here's a breakdown of the average monthly costs for catastrophic health plans by age:

Keep in mind that these costs are averages and can vary depending on your specific situation.

You're eligible for catastrophic health insurance if you're under 30 or qualify for a hardship or affordability exemption. Catastrophic plans are designed for young and healthy individuals without ongoing health conditions.

To qualify for a hardship exemption, you must meet specific criteria, such as facing economic hardship, homelessness, eviction, foreclosure, or domestic violence. You can also qualify if you have substantial debt due to unpaid medical expenses or incurred unexpected increases in expenses from caring for a family member.

Catastrophic plans are also available to those who qualify for an affordability exemption, which is granted if the cheapest plan you can get costs more than 7.97% of your income. This exemption is included under the "general hardship exemption" category.

Here are some specific situations that qualify you for a hardship exemption:

Keep in mind that nearly 59,000 people enrolled in a catastrophic health plan on the public exchanges in 2024, making it a viable option for those who qualify.

Catastrophic health plans cover unexpected emergency medical costs and essential health benefits, including preventive services like health screenings and vaccinations.

If you're looking for alternatives to catastrophic health plans, there are several options, including Medicaid and subsidized ACA plans.

ACA plans are eligible for subsidies that can reduce your costs, depending on your income. These subsidies can make a big difference for people who need affordable health insurance.

Medicaid is another option, but it's not available to everyone, and its eligibility varies by state.

Short-term health insurance is also an option, but it has limited benefits and may not cover pre-existing conditions or provide coverage for maternity care, mental healthcare, and prescription drugs.

COBRA health insurance may be available if you lost your employer-sponsored coverage, but it can be expensive and only provides temporary coverage.

Catastrophic health plans cover all of the essential benefits defined by the ACA, but with very high deductibles, equal to the annual limit on out-of-pocket costs under the ACA.

These plans limit members' out-of-pocket costs for in-network services to no more than the annual out-of-pocket maximum that applies to all plans, which is $9,200 for an individual in 2025, and $10,150 in 2026.

Catastrophic plans cover up to three primary care visits per year before the deductible is met, with copays applying for these visits.

Certain preventive care services are covered with no cost-sharing, just like all ACA-compliant plans.

Catastrophic plans cover the 10 essential health benefits, including ambulatory patient services, emergency services, hospitalizations, laboratory services, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services and devices, pediatric services, pregnancy, maternity and newborn care, and preventive and wellness services and chronic disease management.

Here's a breakdown of the 10 essential health benefits:

In theory, catastrophic options can make sense for someone who is relatively healthy and wants to save on their monthly premiums.

Catastrophic health insurance plans have their downsides. One significant drawback is that they can't be used with ACA premium tax credits to reduce catastrophic health insurance premiums.

Eligibility requirements can be a hurdle for some people. This includes those who may not qualify due to income or other factors.

Out-of-pocket costs can be steep, especially before reaching the deductible. This means you'll need to pay a significant amount for medical expenses before the insurance plan kicks in.

One of the biggest advantages of this plan is that it's available through the ACA marketplace, making it easily accessible to those who qualify.

The deductible and out-of-pocket maximum are the same amount, which simplifies the financial aspect of the plan.

Low-cost premiums make this plan an attractive option for those on a budget.

Another perk is that there's no coinsurance, which means the plan picks up all the costs for in-network healthcare services once you reach your deductible/out-of-pocket maximum.

This plan offers comprehensive coverage through the ACA's essential health benefits, providing a wide range of services and protections.

Here are some key benefits of this plan at a glance:

One of the major downsides of this plan is that you can't use ACA premium tax credits to reduce your catastrophic health insurance premiums. This can be a significant financial burden.

Eligibility requirements can be tricky to navigate, and it's essential to understand what's expected of you before signing up.

The deductible and out-of-pocket costs are exorbitant until you reach the deductible, which can be a substantial amount of money. This means you'll be paying a lot out of pocket before the insurance kicks in.

Catastrophic health insurance plans are designed for people under 30 or those who meet hardship requirements. These plans have low monthly premiums but very high deductibles.

The average monthly cost for catastrophic health insurance varies by age. For example, a 21-year-old can expect to pay around $248 per month, while a 60-year-old will pay around $673 per month.

You'll typically pay out of your own pocket for routine medical care with a catastrophic plan. However, the plan will provide coverage once you've paid thousands and met the deductible.

Here's a breakdown of the average monthly costs for catastrophic health plans by age:

A catastrophic plan is a qualified health plan with minimum essential coverage, meaning you can participate in the benefit. Your employer can reimburse you for your health insurance premiums and out-of-pocket medical expenses tax-free.

Catastrophic health insurance plans can be a viable alternative for those who don't need comprehensive coverage. They're designed for young adults or people on a tight budget.

Catastrophic plans cover unexpected emergency medical costs, which can be a huge relief in times of crisis. This includes medical bills that could otherwise be overwhelming.

If you're already covered under a parent's plan, you might not need catastrophic insurance. However, if you're on your own, it's worth considering as a budget-friendly option.

These plans also cover essential health benefits, such as preventive services like health screenings and vaccinations. This is a great perk, especially for people who take their health seriously.

If you're not eligible for a catastrophic health plan, there are other options to consider. Medicaid is one possible alternative, and it's worth looking into if you qualify.

ACA plans are another option, and they're the only ones that come with subsidies to reduce your costs, depending on your income. These subsidies can make a big difference in what you pay for health insurance.

COBRA is also an option if you've lost your employer-sponsored coverage, but be aware that it can be expensive since your employer is no longer contributing to your coverage.

Short-term health insurance is a low-cost option, but it has limited benefits and may not cover pre-existing conditions or provide coverage for maternity care, mental healthcare, and prescription drugs.

Here are some pros and cons of each option to consider:

In some areas, there are no catastrophic plans available, or the lowest-cost insurer may not offer them. It's worth shopping around to find the best option for your needs and budget.

If you're under 30, catastrophic health insurance might not be the best option.

Parents' insurance could be a better choice, especially if you're eligible to stay on their plan until 26.

You can try to get added to your spouse's health insurance if they have coverage, which might be more affordable than COBRA.

Catastrophic health insurance plans are often compared to high-deductible health plans, but they're not exactly the same thing.

A high-deductible health plan has a deductible of at least $1,600 for single coverage or $3,200 for family coverage. Catastrophic health plans, on the other hand, have much higher deductibles, equal to the annual limit on out-of-pocket costs under the ACA, which is $9,200 for a single individual in 2025 and $10,150 in 2026.

Catastrophic plans are only available to people under 30 and those who qualify for hardship or affordability exemptions, making them a distinct option from standard high-deductible health plans.

Here's a key difference: catastrophic health insurance doesn't have coinsurance, which means you'll pay for healthcare up to the deductible on your own and then the insurance plan will pick up the rest of the costs once the deductible is met.

In contrast, high-deductible health plans typically have coinsurance, where you share the costs of healthcare services with the plan.