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What is a Catastrophic Health Insurance Coverage?

health insurance plan

Catastrophic health insurance has low monthly premiums and very high annual deductibles. These plans offer an immediate health insurance option to individuals who need coverage in worst-case scenarios. With catastrophic coverage, you will be responsible for paying all the medical care expenses out of pocket. However, you will receive some protection if you experience a major injury or disease and need intensive medical care. 

Learn more about catastrophic health insurance, including what it covers and how it works here.  

Who Is Eligible for a Catastrophic Health Plan?

A catastrophic plan is not open to everyone. Individuals under the age of 30 can easily qualify for this program. Nevertheless, if you are over 30 and want catastrophic coverage, then you must have one of the following hardship exemptions:

1) You were a homeless person.

2) You received a shut-down notice from the electricity company.

3) You had been evicted or were facing foreclosure.

4) You experienced family abuse or domestic violence.

5) You could not pay your medical bills, which resulted in significant debt.

6) You experienced substantial damage to your property due to flood, fire, natural or human-caused disasters.

7) You experienced an unanticipated increase in your basic expenses because of your disability, caring for a sick relative, or aging family member. 

8) You filed for bankruptcy.

9) You didn’t qualify for Medicaid coverage.

11) The exemption for “grandfathered” health coverage plans was not available.

12) You have another hardship. If you have experienced another hardship, be sure to contact your health insurance company as quickly as possible. (Note: they will provide you with a form to describe your situation. After a one-month processing period, you will be notified about your eligibility for a catastrophic plan.)

To be eligible for a hardship exemption, you must complete a hardship application form provided by your state’s insurance agency. Moreover, you can get additional details about exemption forms and submission instructions here

Do premium subsidies apply to catastrophic health insurance?

Please note that you cannot use Obamacare subsidies to purchase catastrophic coverage. If you qualify for cost-sharing reductions or premiums tax credits, a Bronze or Silver plan will likely provide more value (and have lower out-of-pocket costs). Check your eligibility for subsidies by visiting our site, InsuranceShopping.com.

How does catastrophic health insurance compare to other Marketplace insurance?

Catastrophic plans provide the same essential healthcare benefits as other Marketplace plans. Like other insurance plans, they also offer coverage for certain preventive care services at no cost. These programs also cover three primary care visits per year before reaching your deductible. 

Otherwise, all other healthcare services have out-of-pocket expenses until you reach your deductible. In 2020, the deductible for all catastrophic health plans was $8150. Once you’ve met your deductible, your catastrophic program will pay for all medical services with no coinsurance and copays. For more information about health insurance plans, check out Insurance Shopping.

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