Catastrophic Health Plan
A low-premium, very-high-deductible health insurance plan designed to protect against major medical expenses.
What is Catastrophic Plan?
A catastrophic health plan is an ACA-compliant health insurance plan that features very low monthly premiums in exchange for a very high annual deductible — equal to the ACA's out-of-pocket maximum (approximately $9,450 for an individual in 2024). Enrollees pay virtually all medical costs out of pocket until the deductible is met, after which the plan covers 100% of in-network costs for the remainder of the year. Catastrophic plans also cover three primary care visits per year and preventive care before the deductible. Eligibility is restricted: only individuals under age 30, or those who qualify for a 'hardship' or 'affordability' exemption, may enroll. Catastrophic plans are not eligible for premium tax credits, making them best suited for healthy young adults who want protection against worst-case medical events and can absorb routine costs.
Example
A 27-year-old in good health with no chronic conditions enrolls in a catastrophic plan with a $150/month premium and a $9,450 deductible. She pays out of pocket for a $400 doctor visit and $200 in lab fees. Her annual premium cost is $1,800. If she suffers a serious accident requiring $80,000 in treatment, she pays the first $9,450 and the plan covers the rest.