Catastrophic Health Insurance
What is catastrophic health insurance?
Catastrophic health insurance is a barebones type of health insurance plan that provides coverage only for very severe medical expenses. The Marketplace on healthcare.gov offers four types of insurance plans—Bronze, Silver, Gold, and Platinum, with Bronze plans offering the least coverage at a lower cost, and Platinum plans offering the most coverage at the highest cost. Catastrophic health insurance plans are a tier below Bronze plans, providing even less coverage but also further reducing fixed health insurance costs.
Catastrophic health insurance plans are associated with high deductibles and low monthly premiums. A patient pays relatively little per month in the form of a premium to retain coverage but has to pay a large deductible out-of-pocket before they start receiving coverage.
Catastrophic plans are not available to everyone. To qualify for a Catastrophic health insurance plan, a patient must be under the age of 30, or over the age of 30 with a qualifying exemption based on either hardship or affordability. More information about exemptions is available on healthcare.gov.
Why is catastrophic health insurance important in healthcare?
Health insurance is a significant expense for many Americans, and not everyone is able to afford coverage that is offered by Bronze, Silver, Gold, and Platinum plans. Catastrophic plans allow for lower-income individuals and families to retain coverage via Major Medical Insurance in an affordable manner.
Catastrophic plans are also a helpful option for individuals under 30 who make infrequent use of medical services but still want a safety net for worst-case situations. Although deductibles are high in catastrophic health insurance plans, the costs associated with the deductible are still relatively low compared to the potential expenses incurred by unexpected major accidents or health conditions in uninsured patients.
Additionally, Catastrophic health plans cover essential health benefits, including preventative services like health screenings, most vaccinations, and up to three primary care visits annually, even if a yearly deductible hasn’t been met yet, helping to extend preventative healthcare services to more patients.