How Much Does Catastrophic Health Insurance Cost?

Understanding Catastrophic Health Insurance

Catastrophic health insurance offers a financial safety net against high medical costs from serious illnesses or injuries. These plans feature low monthly premiums but require individuals to pay for most healthcare services until a high deductible is met. They are designed for healthy individuals seeking protection from unexpected, large medical bills.

Eligibility for catastrophic plans is limited to individuals under 30. Those 30 and older may qualify with a hardship or affordability exemption. Hardship exemptions are granted for challenging circumstances, such as homelessness, bankruptcy, domestic violence, or the death of a family member. An affordability exemption applies if the lowest-priced health plan available through an employer or the Affordable Care Act (ACA) Marketplace costs more than 7.97% of a household’s income.

Catastrophic plans cover essential health benefits, similar to other ACA-compliant plans. They include up to three primary care visits per year before the deductible, though copays may still apply. Preventive services, such as screenings and immunizations, are covered at no cost. For most other medical services, individuals are responsible for the full cost until their high deductible is satisfied.

The deductible for catastrophic plans is set at the maximum annual out-of-pocket limit defined by federal regulations. For 2025, this limit is $9,200 for an individual and $18,400 for family coverage. Once this high deductible is paid, the plan covers 100% of in-network, covered services for the remainder of the year. This structure means lower monthly premiums come with considerable financial responsibility for initial medical expenses.

Factors Influencing Premiums

Several factors influence the monthly premium for catastrophic health insurance. An individual’s age is a determinant, with premiums generally increasing as a person gets older due to higher anticipated healthcare utilization.

Location also plays a role in premium costs, varying significantly by state, region, and zip code. This variation is influenced by local healthcare costs, insurer competition, and state regulations.

The high deductible inherent in catastrophic plans is a primary reason for their lower premiums. These plans require individuals to pay a substantial amount out-of-pocket before comprehensive coverage begins, which reduces the insurer’s immediate risk.

Lifestyle choices, such as tobacco use, can also lead to higher premiums due to elevated health risks. Design and pricing models of different insurance providers can result in variations in premiums for similar catastrophic plans.

Comparing Catastrophic Plan Costs

Catastrophic health plans offer the lowest monthly premiums compared to other Marketplace plans (Bronze, Silver, Gold, Platinum). They are a barebones option, providing a safety net for major medical events rather than comprehensive routine care, allowing for more affordable fixed monthly costs.

While catastrophic plans have lower premiums, they come with a high deductible that must be met before the plan pays for most services. Bronze plans, for instance, cover approximately 60% of medical costs on average, while catastrophic plans cover less than 60% before the deductible. This means individuals with catastrophic plans bear a larger financial responsibility for initial healthcare expenses.

In contrast, other metal-tier plans, while having higher monthly premiums, feature lower deductibles and begin covering a larger percentage of costs sooner. For example, Silver plans cover around 70% of costs, Gold 80%, and Platinum 90%.

Despite sharing out-of-pocket maximums with some Bronze plans, catastrophic plans often maintain lower premiums due to how they are treated in risk adjustment calculations. The decision to choose a catastrophic plan depends on an individual’s financial situation, health status, and willingness to accept higher out-of-pocket costs for a lower monthly payment.

Finding Your Specific Cost

To determine the cost of a catastrophic health insurance plan, visit Healthcare.gov or your state’s equivalent marketplace. These platforms allow users to browse available plans and receive prices by entering information like age, zip code, and estimated household income.

Prospective enrollees can input details to generate quotes reflecting plan costs. Catastrophic plans are generally not eligible for premium tax credits (subsidies) to reduce monthly payments.

Therefore, the listed premium for a catastrophic plan is often the final amount an eligible individual will pay, unless a hardship exemption applies. Individuals aged 30 or older who require a hardship exemption must apply for and receive an Exemption Certificate Number (ECN) to enroll.