Catastrophic Health Insurance: Who Qualifies and Is It Right for You?

Catastrophic health insurance is the lowest-premium option on the ACA marketplace. It is designed as a financial safety net for young, healthy people who want protection against worst-case medical scenarios without paying high monthly premiums. But catastrophic plans are not for everyone, and their high deductibles mean you pay for most care out of pocket.

This guide explains who qualifies for catastrophic plans, what they cover, how they compare to other marketplace options, and when they make financial sense. If you are under 30 or facing financial hardship, this could be a coverage option worth considering, but you need to understand the trade-offs.

What Is Catastrophic Health Insurance?

A catastrophic health insurance plan is an ACA-compliant plan available on the marketplace that provides essential health benefits with the lowest possible monthly premium and the highest possible deductible. These plans are sometimes called the below-Bronze tier because they offer even lower premiums than Bronze plans.

The core idea is straightforward: you pay a low monthly premium in exchange for taking on more risk. The plan covers very little until you reach a high deductible, but it caps your total costs in the event of a major medical event. Think of it as insurance against the truly catastrophic, not everyday healthcare expenses.

Despite the high deductible, catastrophic plans are genuine ACA-compliant insurance. They cover all ten essential health benefits, they cannot deny you for pre-existing conditions, and they cap your annual out-of-pocket costs. They are regulated by the same rules that govern every other marketplace plan.

Who Qualifies for a Catastrophic Plan?

Unlike Bronze, Silver, Gold, and Platinum plans, catastrophic plans have eligibility restrictions. You must meet one of two criteria to enroll.

Under 30 Years Old

If you are under 30, you can enroll in a catastrophic plan with no additional qualifications needed. This is the most common path to eligibility. The plan remains available until you turn 30, at which point you will need to switch to a metal tier plan during the next enrollment period unless you qualify for a hardship or affordability exemption.

Hardship Exemption

People 30 and older can qualify with a hardship exemption. The marketplace recognizes several hardship categories that may make you eligible:

• You experienced homelessness
• You were evicted or faced eviction or foreclosure
• You received a shut-off notice from a utility company
• You experienced domestic violence
• You experienced the death of a close family member
• A fire, flood, or other disaster caused substantial damage to your property
• You filed for bankruptcy in the last six months
• You had substantial medical debt in the last 24 months

To apply for a hardship exemption, you submit your request through HealthCare.gov or your state exchange with supporting documentation. If approved, you can enroll in a catastrophic plan regardless of your age.

Affordability Exemption

You may also qualify if the lowest-cost Bronze plan available to you, after any applicable premium tax credits, exceeds a certain percentage of your household income. This affordability threshold is adjusted annually. If no Bronze plan is affordable by this standard, you can enroll in a catastrophic plan as an alternative.

What Does a Catastrophic Plan Cover?

Catastrophic plans are fully ACA-compliant. They cover the same ten essential health benefits as every other marketplace plan. The difference is in how and when you pay for those services.

Before the Deductible

Before you reach your deductible, a catastrophic plan covers the following services at no cost to you:

• Preventive services. All ACA-required preventive services are covered at 100 percent. This includes annual physicals, immunizations, recommended screenings like blood pressure and cholesterol checks, women's preventive services including contraception, and more.
• Three primary care visits per year. This is a unique feature of catastrophic plans. You get three primary care visits before the deductible applies. This allows you to see a doctor for non-preventive issues, like a cold, flu, minor injury, or ongoing symptom, without paying the full out-of-pocket price. The cost of these visits is at the plan's negotiated rate, not applied to your deductible.

These pre-deductible benefits provide a baseline of accessible care even though the plan is designed primarily for catastrophic protection.

After the Deductible

Once you meet the deductible, the plan covers 100 percent of all essential health benefits for the rest of the plan year. There is no coinsurance or copay after the deductible is met. The essential health benefits covered include:

• Doctor visits and outpatient care
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use services
• Prescription drugs
• Rehabilitative and habilitative services
• Laboratory services
• Preventive and chronic disease management
• Pediatric services including dental and vision

How Much Does a Catastrophic Plan Cost?

Catastrophic plans have the lowest monthly premiums of any ACA marketplace option. For a young adult in their mid-20s, monthly premiums typically range from $100 to $250 depending on location and the specific insurer. For someone in their late 20s, premiums may be slightly higher but still below most Bronze plans.

However, the deductible is the maximum allowed under the ACA. For 2026, the out-of-pocket maximum and thus the catastrophic plan deductible is approximately $9,200 for an individual. This means you will pay the full cost of most medical services until your spending reaches that threshold in a given year.

To illustrate the cost structure:

• Monthly premium: approximately $150 to $200 for a 26-year-old
• Annual premium cost: approximately $1,800 to $2,400
• Deductible: approximately $9,200
• Maximum total annual cost: premiums plus deductible, approximately $11,000 to $11,600

In a healthy year where you only use preventive care and perhaps one or two primary care visits, your total cost is just the premiums. In a worst-case year with a major medical event, your total cost is capped at roughly $11,000 to $11,600. Without insurance, that same event could cost tens or hundreds of thousands of dollars.

Catastrophic Plans vs. Bronze Plans

The most common comparison for catastrophic plans is against Bronze plans, which are the next step up in the marketplace hierarchy. Here is how they differ.

Premiums: Catastrophic plans have lower premiums than Bronze plans. The difference varies by market but can range from $30 to $100 per month.

Deductibles: Both have high deductibles, but they are structured differently. Catastrophic plans have a single deductible equal to the out-of-pocket maximum. Bronze plans typically have a lower deductible but add coinsurance or copays after the deductible, and a separate out-of-pocket maximum.

After-deductible costs: Catastrophic plans cover 100 percent after the deductible. Bronze plans typically require coinsurance, often 40 percent, after the deductible is met, up to the out-of-pocket maximum.

Subsidies: This is the critical difference. Bronze plans are eligible for premium tax credits. Catastrophic plans are not. If you qualify for subsidies, a Bronze plan with credits applied may have a lower net premium than a catastrophic plan at full price. In some cases, a subsidized Silver plan could even be cheaper.

Primary care visits: Catastrophic plans cover three primary care visits before the deductible. Many Bronze plans require you to pay for visits against the deductible, though some have copays for primary care before the deductible.

The bottom line: always compare the subsidized cost of Bronze and Silver plans against the full-price cost of a catastrophic plan. For many people, subsidized metal tier plans offer better value.

When a Catastrophic Plan Makes Sense

A catastrophic plan can be the right choice in certain situations. Here are the scenarios where it tends to work well.

• You are under 30 and healthy. If you rarely visit the doctor beyond annual checkups and do not take regular medications, paying a low premium for catastrophic coverage gives you a safety net without a high monthly cost.
• You do not qualify for premium tax credits. If your income is too high for subsidies, you are paying full price regardless. In that case, the catastrophic plan's lower premium may save you hundreds of dollars per year compared to a Bronze plan.
• You want the lowest possible monthly payment. If your primary goal is minimizing your monthly premium and you can handle the risk of a high deductible, a catastrophic plan achieves that.
• You have savings to cover the deductible. The high deductible means you need to be prepared to pay up to $9,200 out of pocket if something goes wrong. If you have an emergency fund that could absorb this cost, the risk is manageable.

When a Catastrophic Plan Does Not Make Sense

There are several situations where a catastrophic plan is a poor choice.

• You qualify for premium tax credits. If subsidies can bring a Bronze or Silver plan's premium to the same level or lower than a catastrophic plan, the metal tier plan gives you more coverage for equal or less cost.
• You have ongoing medical needs. If you take regular medications, see specialists, or have a chronic condition, you will likely spend enough on healthcare to make a plan with a lower deductible more cost-effective overall.
• You cannot afford the deductible. If a $9,200 surprise expense would be financially devastating, the protection offered by a catastrophic plan is limited. A plan with a lower deductible and higher premium may be safer.
• You qualify for cost-sharing reductions. If your income is between 100 and 250 percent of the federal poverty level, a Silver plan with CSR enhancements provides dramatically lower deductibles and out-of-pocket costs. This is far superior protection compared to a catastrophic plan.

How to Enroll in a Catastrophic Plan

Enrolling in a catastrophic plan follows the same process as any other marketplace plan, with one additional step for people 30 and older.

• Under 30: Go to HealthCare.gov or your state exchange during open enrollment or a Special Enrollment Period. Complete the application and select a catastrophic plan from the available options. No exemption is needed.
• 30 and older: You must first obtain a hardship or affordability exemption. Apply for the exemption through HealthCare.gov or your state exchange. Once approved, you can select a catastrophic plan during the enrollment window.

If you are currently on a catastrophic plan and turn 30, you can stay on the plan through the end of the current plan year. At the next enrollment period, you will need to switch to a metal tier plan unless you qualify for an exemption.

Making the Most of a Catastrophic Plan

If you choose a catastrophic plan, these strategies help you get the most value from it.

• Use all preventive care. Preventive services are free. Get your annual checkup, screenings, and vaccinations. These visits keep you healthy and catch problems early before they become expensive.
• Use your three primary care visits. These pre-deductible visits are a valuable benefit. Use them for any non-preventive health concerns rather than going to urgent care, which would be subject to the deductible.
• Stay in-network. Even before meeting your deductible, in-network providers charge negotiated rates that are significantly lower than what you would pay as an uninsured patient. Always verify your provider is in-network before receiving care.
• Build an emergency fund. Set aside money to cover the deductible in case of a medical emergency. Even saving $200 per month builds a meaningful cushion over time.
• Ask about cash-pay and generic options. For prescriptions and minor procedures, ask your provider about cash-pay discounts or generic alternatives. Since you are paying out of pocket before the deductible, reducing the sticker price of individual services matters.

The Bottom Line

Catastrophic health insurance is a legitimate ACA-compliant coverage option with the lowest premiums on the marketplace. It protects you from the financial devastation of a major medical event while keeping your monthly costs low. You get free preventive care, three primary care visits per year, and all essential health benefits after a high deductible.

But the high deductible means you are paying for most routine care yourself. And because catastrophic plans are not eligible for premium tax credits, they are only the cheapest option if you do not qualify for subsidies. If your income qualifies you for marketplace subsidies, a Bronze or Silver plan with credits applied may cost the same or less per month while offering significantly better coverage.

Before choosing a catastrophic plan, run the numbers on HealthCare.gov. Enter your income, check your subsidy eligibility, and compare the total annual cost of a catastrophic plan against a subsidized Bronze and Silver plan. If the subsidized options cost less, choose one of those. If you truly do not qualify for subsidies, are under 30 and healthy, and want the lowest possible premium with catastrophic protection, this plan may be the right fit. The key is making an informed choice based on your specific financial situation and health needs.