Catastrophic Health Plans: Affordable Coverage for Healthy Individuals

What is a Catastrophic Health Plan?

Catastrophic health plans are a type of health insurance designed for healthy individuals under age 30 or those who qualify for a hardship exemption. They provide coverage for major medical events, such as hospitalization, emergency care, and surgery, but do not cover routine medical care.

Benefits of Catastrophic Health Plans

The primary benefit of catastrophic health plans is their low premiums. Because they cover only major medical expenses, premiums are significantly lower than those for comprehensive health insurance plans. This can be particularly appealing for individuals with low incomes or those who are healthy and rarely seek medical care.

Limitations of Catastrophic Health Plans

While catastrophic health plans offer low premiums, they also have limitations. They do not cover routine medical care, such as doctor’s visits, prescription drugs, or preventive screenings. This means that individuals must pay for these services out-of-pocket. Additionally, catastrophic health plans have high out-of-pocket maximums, typically around $7,000 to $8,500. This means that individuals who need significant medical care could face high costs before their insurance kicks in.

Private Catastrophic Health Plans

In the past, catastrophic health plans were available through the Affordable Care Act (ACA) marketplace. However, they were eliminated in 2019. Individuals who are interested in catastrophic health insurance can now purchase them through private insurance companies.

Is it Okay to Go Private for a Catastrophic Health Plan?

Whether or not it is advisable to purchase a catastrophic health plan through a private company depends on individual circumstances. If you are healthy, rarely seek medical care, and are looking for a low-cost option, a catastrophic health plan may be a suitable choice. However, if you have preexisting conditions, anticipate needing medical care, or have a high risk of injury, a comprehensive health insurance plan would be more appropriate.


Catastrophic health plans can provide affordable coverage for healthy individuals who are looking to minimize their health insurance costs. However, it is important to carefully consider the limitations of these plans and make sure they meet your specific needs. If you have any questions or concerns, it is always advisable to consult a licensed insurance agent for personalized guidance.

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