What Are Catastrophic Health Plans?
Catastrophic health insurance plans are ACA marketplace plans with very low monthly premiums and very high deductibles. They're designed to protect you from worst-case scenarios—serious illnesses or accidents—while keeping your monthly costs minimal if you're generally healthy.
Catastrophic plans cover the same Essential Health Benefits as other ACA plans, but you pay the full cost of most care until you meet the high deductible. After that, the plan pays the majority of your costs.
Catastrophic Plan Profile
Protection for worst-case scenarios
Monthly Premium
Lowest available (often $150-300/month in Texas)
Annual Deductible
Matches out-of-pocket maximum ($9,200 for 2024)
After Deductible
Plan pays ~90-100% of costs
Who Can Buy a Catastrophic Plan?
Catastrophic plans have strict eligibility requirements. You must meet at least one of these criteria:
Age Requirement
You must be under 30 years old on January 1st of the coverage year.
Example: If you're 29 on January 1, 2024, you can enroll in a catastrophic plan for all of 2024, even if you turn 30 during the year.
Hardship Exemption
You qualify for a hardship or affordability exemption regardless of age.
Common hardships: Homelessness, eviction, bankruptcy, substantial medical debt, domestic violence, death of family member, or other circumstances making coverage unaffordable.
What Catastrophic Plans Cover
Despite their name, catastrophic plans must cover all 10 Essential Health Benefits required by the ACA. However, how and when these benefits kick in differs from standard plans.
Covered at 100% BEFORE the Deductible
Preventive Services (No Cost)
- ✓ Annual wellness visits
- ✓ Vaccines (flu, COVID-19, etc.)
- ✓ Cancer screenings
- ✓ Blood pressure checks
- ✓ Cholesterol screening
- ✓ Depression screening
- ✓ Diabetes screening
- ✓ Well-woman visits
- ✓ Contraception
- ✓ STI testing & counseling
Important: Services must be from in-network providers and meet USPSTF guidelines.
Covered AFTER You Meet the Deductible
Once you reach your deductible (typically $9,200+ in 2024), the plan covers most healthcare costs:
- Ambulatory patient services (doctor visits)
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health and substance abuse treatment
- Prescription drugs
- Rehabilitative services
- Laboratory services
- Pediatric services including dental and vision
The "Three Primary Care Visits" Rule
Special Provision
Catastrophic plans must cover at least three primary care visits per year before the deductible, though you may still pay a copay or coinsurance for these visits.
Understanding Catastrophic Plan Costs
Cost Type | Typical Amount | Notes |
---|---|---|
Monthly Premium | $150-$300 | Lowest of all ACA plan types |
Annual Deductible | $9,200+ (2024) | Matches the out-of-pocket maximum |
Out-of-Pocket Maximum | $9,200 (2024) | Maximum you'd pay in a year |
Doctor Visit | Full cost until deductible met | Except preventive services & 3 primary care visits |
Prescription Drugs | Full cost until deductible met | No copays before deductible |
Emergency Room | Full cost until deductible met | Could be $1,000-$3,000+ per visit |
Pros & Cons of Catastrophic Plans
Advantages
- Lowest Monthly Premium: Keep monthly costs minimal if you're healthy
- Protection from Catastrophe: Covers worst-case medical scenarios
- Preventive Care Covered: Get annual checkups and screenings for free
- Out-of-Pocket Limit: Maximum financial exposure is capped
- Qualifies as Coverage: Satisfies individual mandate (where applicable)
Disadvantages
- No Subsidies: Can't use premium tax credits even if income-eligible
- Very High Deductible: Pay $9,000+ before coverage kicks in
- Limited Eligibility: Must be under 30 or have hardship exemption
- High Risk: A single ER visit or prescription can cost thousands
- Not Cost-Effective: If you need regular care, total costs may exceed other plans
Who Should Consider a Catastrophic Plan?
Good Candidates
✓ You're in excellent health
Rarely visit doctors beyond annual checkups
✓ You have emergency savings
Can afford $5,000-$9,000 in unexpected medical costs
✓ You don't take regular medications
No ongoing prescriptions that would cost hundreds monthly
✓ You want catastrophic protection only
Primarily concerned about major accidents or illnesses
Alternatives to Consider
Before choosing a catastrophic plan, compare these options:
Bronze Plan with Premium Tax Credits
If you qualify for premium tax credits, a Bronze plan with subsidies might cost less than an unsubsidized catastrophic plan AND have better coverage. Bronze plans also have slightly lower deductibles.
How to Enroll in a Catastrophic Plan
- Verify Eligibility: Confirm you're under 30 OR have a hardship exemption
- Shop on Healthcare.gov: Catastrophic plans appear as a separate category
- Compare Plans: Look at premium, network, and out-of-pocket costs
- Enroll During Open Enrollment: November 1 - January 15 annually
- Special Enrollment: Available if you have a qualifying life event
Not Sure If Catastrophic Is Right for You?
I can help you compare catastrophic plans to Bronze and Silver plans with subsidies to see which option saves you the most money based on your health needs and income.