Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Written By Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Deputy Editor, Insurance Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
| Lead Editor, Insurance
Updated: Jun 17, 2024, 5:52am
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Catastrophic health insurance is a type of health insurance that is designed primarily to help pay for severe, high-cost medical emergencies rather than routine healthcare costs.
Catastrophic health insurance plans are low cost and offer the same essential health benefits found in an Affordable Care Act plan, but also come with high deductibles and out-of-pocket costs when you need healthcare.
Key Takeaways of Catastrophic Health Insurance
Catastrophic health insurance is comprehensive coverage only available to people under 30, those facing major financial problems—such as homelessness—or those who can’t afford any other health insurance.
Catastrophic health insurance plans, offered by private health insurance companies, have high deductibles. But once you reach the deductible, the health plan pays for all of your healthcare services.
Since catastrophic health insurance offers comprehensive coverage with low premiums, catastrophic plans can be a good option for health insurance for young adults. But remember the high deductible means you’ll pay all of the costs for healthcare services until you reach the deductible except for free preventive care.
Catastrophic health insurance works similar to standard health insurance. You pay a premium to have catastrophic health insurance and the plan covers you for healthcare services like doctor appointments, prescription drugs and hospitalizations.
There are health insurance deductibles for catastrophic plans. The deductible can be no more than $9,450 per person or $18,900 for a family. A deductible is what you pay for healthcare services in a year before the health plan begins to pay costs. Unlike standard health insurance, catastrophic health insurance doesn’t have coinsurance.
Coinsurance is the part of a standard health plan in which a member splits the costs of healthcare services with the health plan, such as the insurer pays 70% and you pay 30% of costs. This portion comes after the member exceeds the plan’s annual deductible and before you reach the plan’s out-of-pocket maximum.
Rather than coinsurance, a catastrophic plan’s deductible and out-of-pocket max are the same amount. Once you get to a catastrophic health plan’s deductible, the health plan pays for the rest of the healthcare service costs for the rest of the year.
So let’s say you go to the doctor multiple times and wind up hospitalized in a year. The total healthcare services bill winds up being $10,000. If your deductible is $9,450, you’d have to pick up $9,450 before your health plan starts paying. But once you’ve reached the $9,450 plateau, the health plan pays for the rest of the health costs for the rest of the year.
A catastrophic health insurance plan may be needed if you qualify and can’t afford other health insurance coverage. Think of a catastrophic plan as a financial safety net. It provides the same level of coverage found in a standard health plan but with a much higher deductible.
A catastrophic plan could also be good if you want low-cost coverage that offers physicals and preventive care. Catastrophic health plans also must cover at least three primary care visits per year before members meet their deductible and cover preventive services at no cost.
People who qualify for a catastrophic health insurance plan include:
Those who may qualify for an exemption need to submit an application for the exemption and receive an Exemption Certificate Number (ECN). You use the ECN to enroll in a catastrophic health plan.
Here’s the difference between the exemptions:
Being unemployed doesn’t qualify you for a hardship exemption.
Catastrophic health insurance offers the same level of coverage found in an ACA health insurance plan.
That includes the 10 essential health benefits:
The average monthly cost for catastrophic health insurance for someone age 30 is $282. We averaged costs for 77 catastrophic health plans nationwide to find averages.
