Wondering who is a good candidate for catastrophic health insurance plans? These specialized health plans attract surprisingly few enrollees—only 54,109 people out of more than 24 million exchange participants nationwide chose this option for 2025 coverage.
Catastrophic health plans combine low monthly premiums with very high deductibles—currently up to $9,450 for individuals and $18,900 for families. Although these plans cover all essential health benefits required by the ACA, you’ll face substantial out-of-pocket costs before insurance kicks in. For 2025, the individual deductible reaches $9,200, increasing to $10,600 in 2026.
Eligibility for catastrophic health coverage is limited. You must be under 30 years old or qualify through one of 14 hardship exemptions, including situations like homelessness, eviction, domestic violence, or substantial medical debt. However, recent federal rules have expanded access to these plans for more ACA shoppers, primarily to help offset rising marketplace premiums.
Catastrophic health insurance represents a distinct category of health coverage designed primarily to protect you financially against serious medical emergencies rather than routine healthcare costs. These plans offer a specific combination of minimal coverage with significant cost-sharing requirements.
A catastrophic health plan is a qualified health plan available through the Health Insurance Marketplace that covers essential health benefits while maintaining lower monthly premiums. Essentially, these plans serve as a financial safety net, providing comprehensive coverage specifically designed to shield you from devastating medical expenses that could result from serious illness or injury.
The primary purpose of catastrophic coverage is straightforward – to offer affordable protection against worst-case scenarios. Think of it as insurance that helps prevent financial ruin from unexpected medical catastrophes while keeping your monthly costs manageable.
Catastrophic plans stand apart from other Affordable Care Act (ACA) plans in several significant ways:
Deductible structure: Catastrophic plans have much higher deductibles – $9,200 for an individual in 2025, increasing to $10,600 in 2026.
Premium levels: They typically feature lower monthly premiums than Bronze plans.
Cost-sharing approach: Unlike standard health insurance with coinsurance, catastrophic plans have the same amount for both deductible and out-of-pocket maximum.
Eligibility restrictions: These plans are available only to people under 30 or those qualifying for hardship exemptions.
Subsidy limitations: You cannot use premium tax credits (subsidies) with catastrophic plans.
Catastrophic plans must cover the same essential health benefits as other ACA plans, yet they’re designed to cover less than 60% of average costs for a standard population. This contrasts with Bronze plans, which cover between 56-62% of costs.
In practical terms, catastrophic coverage means your plan covers three specific types of care regardless of whether you’ve met your deductible:
Preventive services at no cost (annual physicals, immunizations, screenings)
At least three primary care visits per year
All essential health benefits required by the ACA
For everything else – specialists, emergency room visits, hospitalizations, medications – you’ll pay the full cost until reaching your annual deductible. After meeting this substantial threshold, the plan pays 100% of covered services for the remainder of the year.
This structure creates a distinct meaning for “catastrophic coverage”: minimal day-to-day assistance but complete financial protection once medical costs become truly catastrophic. The plan primarily shields you from financial disaster due to major medical events rather than helping with routine healthcare expenses.
Starting in 2026, an important change occurs – catastrophic plans will become HSA-qualified, meaning you can contribute to a Health Savings Account while enrolled in catastrophic coverage. This represents a significant enhancement to their value proposition for certain consumers.
Eligibility for catastrophic health insurance plans comes with strict requirements. Not everyone can enroll in these low-premium, high-deductible plans, as they’re designed for specific groups of consumers.
The most straightforward qualification for catastrophic health coverage is age. If you’re under 30 years old, you automatically qualify to purchase a catastrophic plan through the Health Insurance Marketplace. This age restriction serves as the primary eligibility factor, making these plans particularly accessible for young adults who generally need less medical care and might prefer lower monthly premiums.
For those under 30, no special exemption or additional qualification is needed – you can simply select a catastrophic plan during open enrollment or when you qualify for a special enrollment period.
If you’re 30 or older, you’ll need to qualify for either a hardship or affordability exemption to purchase catastrophic coverage. These exemptions recognize that certain life circumstances can make standard health insurance unaffordable or impractical.
Hardship exemptions apply when you’ve experienced circumstances that prevented you from obtaining regular health coverage. Qualifying hardships include:
Homelessness
Eviction or foreclosure (or facing either)
Receiving a utility shut-off notice
Experiencing domestic violence
Death of a close family member
Bankruptcy
Substantial medical debt
Property damage from disaster (fire, flood, etc.)
Caring for an ill, disabled, or aging family member with unexpected expense increases
Affordability exemptions are available if the lowest-priced available health coverage would cost more than 7.97% of your household income. For 2025, this threshold increases to 8.09%.
Most hardship exemptions cover the month before, during, and after the hardship occurred. In certain situations, the exemption might extend up to a full calendar year.
Starting November 1, 2025, major changes to catastrophic plan eligibility will take effect for 2026 coverage. These changes significantly expand who can qualify for catastrophic health insurance plans.
Under the new rules, you’ll be eligible for a hardship exemption to purchase catastrophic coverage if:
Your income makes you ineligible for advance premium tax credits (below 100% or above 400% of federal poverty level)
Your income exceeds 250% of federal poverty level, making you ineligible for cost-sharing reductions
For 2025, this means individuals earning above $62,600 (400% FPL) will become newly eligible. Additionally, those earning above $39,125 (250% FPL) but below 400% FPL will qualify, though selecting a catastrophic plan means forfeiting premium tax credits.
Furthermore, starting in 2026, catastrophic plans will become HSA-qualified, allowing you to contribute to a Health Savings Account while enrolled in catastrophic coverage.
Contrary to popular belief, age alone doesn’t permanently disqualify you from catastrophic coverage. If you’re over 40, you can still access catastrophic health insurance through hardship or affordability exemptions.
For older adults, catastrophic plans can serve as complementary coverage options. Moreover, beginning in 2026, the expanded eligibility will make these plans more accessible to adults over 40 who earn above 400% of the federal poverty level.
To apply for an exemption, you can either:
Apply online through HealthCare.gov (starting November 2025)
Submit a hardship exemption form by mail
After approval, you’ll receive an Exemption Certificate Number (ECN) needed to enroll in a catastrophic health plan.
Understanding the unique structure of catastrophic health coverage helps determine if these plans fit your healthcare needs. Let’s examine their key features in detail.
Catastrophic health plans operate on a simple principle: lower monthly premiums in exchange for significantly higher deductibles. For 2025, the deductible for catastrophic plans equals $9,200 for an individual, increasing to $10,600 in 2026. This amount represents the maximum out-of-pocket limit allowed under ACA regulations.
The trade-off becomes clear when comparing costs. You’ll pay substantially less each month for premiums compared to other plan types. Consequently, your total annual spending might be lower if you rarely need medical care beyond preventive services.
Despite their low-cost structure, catastrophic plans must cover all ten essential health benefits required by the Affordable Care Act. These include:
Preventive and wellness services
Emergency services
Hospitalization
Prescription drugs
Laboratory services
Mental health and substance use disorder services
Maternity and newborn care
Pediatric services
Ambulatory patient services
Rehabilitative services
This comprehensive coverage provides protection against serious illness or injury that could result in devastating medical expenses.
One notable feature of catastrophic plans is that they cover certain services regardless of whether you’ve met your deductible:
All preventive services at no cost (annual physicals, immunizations, screenings)
At least three primary care visits per year before meeting your deductible
For these three visits, copays may apply, yet the insurance company pays at least part of the cost even if you haven’t reached your deductible. This benefit provides basic access to healthcare without requiring full out-of-pocket payment.
Unlike other plans that may require you to pay a percentage of costs (coinsurance) even after meeting your deductible, catastrophic plans are simpler. Once you reach your deductible amount, the plan pays 100% of covered services for the remainder of the year.
This feature offers financial predictability since there’s a clear ceiling on your potential healthcare spending. After paying $9,200 in 2025 (or $10,600 in 2026), you won’t face additional costs for covered services.
When comparing catastrophic plans to Bronze-level plans, several distinctions emerge:
Feature | Catastrophic Plan | Bronze Plan |
Premium cost | Lower | Slightly higher |
Deductible | $9,200 (2025) | Typically lower |
Subsidy eligibility | No | Yes |
Actuarial value | Less than 60% | 56-62% |
Group market availability | No | Yes |
The coverage provided by catastrophic and Bronze plans is actually quite similar. Bronze plans cover an average of 56-62% of costs for a standard population, whereas catastrophic plans cover less than 60%.
The primary difference often comes down to monthly premium costs, with some analysts noting differences between $5-$10 monthly, though real-world examples show potential savings of nearly $1,000 annually for those who choose catastrophic coverage.
Deciding if catastrophic health insurance is right for you requires weighing its advantages against its limitations. These plans offer distinct benefits alongside notable drawbacks that make them suitable for specific situations.
The primary benefit of catastrophic health insurance is its affordability. With lower monthly premiums than traditional health plans, catastrophic coverage keeps your regular payments manageable. These plans serve as a financial safety net, protecting you from devastating medical costs that could result from serious illness or injury.
Even with high deductibles, catastrophic plans include important benefits:
Complete coverage for preventive services with no cost-sharing
Three primary care visits covered annually before meeting your deductible
No coinsurance after reaching your deductible, meaning the plan pays 100% of in-network costs
Comprehensive protection against worst-case scenarios like hospitalization or surgery
For example, without insurance, a five-day hospital stay could cost approximately $46,500, yet a catastrophic plan with an $8,550 deductible would save you around $38,000.
Nevertheless, catastrophic health insurance comes with significant limitations:
You cannot use premium tax credits (subsidies) to reduce catastrophic plan costs
The deductible equals the maximum out-of-pocket limit: $9,200 in 2025 and $10,600 in 2026
All non-preventive services (except three primary care visits) require full payment until you meet the deductible
Until 2026, catastrophic plans cannot be paired with Health Savings Accounts (HSAs)
Limited availability – insurers don’t offer catastrophic plans in all states
First, in 2025, only 54,109 people out of more than 24 million exchange enrollees nationwide chose catastrophic coverage. Second, in areas where catastrophic plans are available, options remain limited – for instance, a 25-year-old in Orlando, Florida had access to 61 Bronze plans but only three catastrophic options.
Catastrophic health insurance typically benefits:
Young, healthy individuals who rarely need medical care beyond preventive services
People who don’t qualify for government subsidies or Medicaid
Those who can afford to pay occasional out-of-pocket medical expenses
Individuals with enough savings to cover their full deductible if necessary
Those seeking protection exclusively against serious medical emergencies
Most importantly, catastrophic coverage makes sense for people who don’t anticipate many medical costs throughout the year. If you require regular doctor visits or take prescription medications, the high deductible structure may result in greater overall expenses than a more comprehensive plan.
Several types of consumers stand to benefit from catastrophic health insurance plans based on their specific circumstances and financial needs.
For those rarely visiting doctors, catastrophic health plans make financial sense. These plans work best for people who:
Have no chronic conditions requiring ongoing care
Don’t take regular prescription medications
Can afford to pay out-of-pocket for occasional medical needs
Want protection against major medical emergencies
Their main advantage is the 100% coverage after the deductible, whereas Bronze plans typically require coinsurance until reaching the separate out-of-pocket maximum.
Catastrophic plan enrollees are primarily those earning too much to qualify for subsidies. As premium tax credits cannot be used with catastrophic plans, they appeal to individuals ineligible for financial assistance but seeking lower monthly premiums.
High-income individuals often choose these plans for their lower monthly costs compared to other ACA options. Catastrophic plans typically offer the lowest premiums among ACA health plan categories, making them attractive for those willing to assume more financial risk.
Starting in 2026, catastrophic plans will become HSA-eligible. Enrollees can contribute up to $4,400 for self-only coverage and $8,750 for family coverage, combining low premiums with tax-advantaged savings.
In regions with few insurance choices, catastrophic coverage offers an affordable alternative. Notably, some areas like Wyoming had no catastrophic plans available in 2025, so availability varies by location.
Catastrophic health insurance offers a specific solution for those seeking minimal monthly costs while maintaining protection against major medical emergencies. These plans serve a distinct purpose – providing affordable coverage with high deductibles that shield you from financial disaster during serious illness or injury.
You qualify for catastrophic coverage if you’re under 30 or meet specific hardship criteria. However, eligibility expands significantly in 2026, making these plans available to more Americans, particularly those with incomes above subsidy thresholds. Additionally, the HSA-qualification feature starting in 2026 adds substantial value for long-term financial planning.
Before choosing a catastrophic plan, consider your healthcare usage patterns. These plans benefit healthy individuals who rarely need medical care beyond preventive services. The low premium structure works best when you can afford potential out-of-pocket costs up to the full deductible amount. Conversely, if you require regular medications or frequent doctor visits, a Bronze or Silver plan might prove more economical despite higher monthly premiums.
Ultimately, catastrophic health insurance represents a calculated trade-off – accepting higher initial costs for medical care in exchange for lower monthly payments. This bargain suits young, healthy individuals, those without subsidy eligibility, and consumers prioritizing protection against worst-case scenarios rather than day-to-day healthcare expenses. Your unique financial situation and health needs should guide this important coverage decision.
Catastrophic health insurance plans offer a unique approach to healthcare coverage, combining low monthly premiums with high deductibles to protect against major medical emergencies while keeping regular costs manageable.
• Age and hardship determine eligibility: You must be under 30 or qualify for specific hardship exemptions, though 2026 rules expand access significantly.
• High-deductible, low-premium structure: Plans feature $9,200 deductibles in 2025 ($10,600 in 2026) but offer the lowest monthly premiums among ACA options.
• Best for healthy, high earners: Ideal candidates are young, healthy individuals who rarely need medical care and don’t qualify for government subsidies.
• Limited day-to-day coverage: You pay full costs until meeting the deductible, except for preventive care and three annual primary visits.
• Major 2026 enhancement: Plans become HSA-qualified, allowing tax-advantaged savings contributions while maintaining catastrophic coverage.
These plans work best as financial safety nets rather than comprehensive healthcare solutions, making them suitable for those prioritizing emergency protection over routine medical expenses.
Q1. Who is eligible for catastrophic health insurance plans? Catastrophic health insurance plans are primarily available to individuals under 30 years old or those who qualify for specific hardship exemptions. Starting in 2026, eligibility will expand to include more people, particularly those with incomes above subsidy thresholds.
Q2. What are the main features of catastrophic health insurance plans? Catastrophic plans have very high deductibles (e.g., $9,200 in 2025) but offer lower monthly premiums. They cover essential health benefits, provide free preventive care, and include three primary care visits per year before the deductible is met. After reaching the deductible, the plan covers 100% of in-network costs.
Q3. How do catastrophic plans compare to other health insurance options? Compared to Bronze plans, catastrophic plans typically have lower monthly premiums but higher deductibles. They offer similar coverage for essential health benefits but are not eligible for premium tax credits (subsidies). Catastrophic plans are best suited for those who rarely need medical care beyond preventive services.
Q4. What are the advantages and disadvantages of catastrophic health insurance? The main advantages are lower monthly premiums and protection against major medical emergencies. Disadvantages include high out-of-pocket costs before coverage kicks in, ineligibility for subsidies, and limited availability in some areas. These plans are most beneficial for young, healthy individuals who can afford potential out-of-pocket expenses.
Q5. Will catastrophic plans become HSA-eligible in the future? Yes, starting in 2026, catastrophic health insurance plans will become eligible for use with Health Savings Accounts (HSAs). This change will allow enrollees to contribute to tax-advantaged savings accounts while maintaining catastrophic coverage, adding significant value for long-term financial planning.