How Much Is Catastrophic Health Insurance?

Health insurance in the United States helps individuals manage the financial impact of medical needs. Among the various types of coverage available, catastrophic health insurance plans serve a specific purpose. These plans act as a safety net, protecting against overwhelming costs from severe illnesses or injuries. They feature lower monthly premiums but require individuals to pay a substantial amount out-of-pocket before the plan begins to cover most medical expenses.

What is Catastrophic Health Insurance?

Catastrophic health insurance plans are a distinct category of coverage under the Affordable Care Act (ACA) Marketplace. Their primary function is to shield individuals from exorbitant medical bills in the event of a major health crisis, such as a serious accident or unexpected illness. These plans are not intended for covering routine medical care or managing chronic conditions on an ongoing basis. Instead, they provide a financial backstop for high-cost, unforeseen medical events.

Individuals must generally be under 30 years old to enroll in a catastrophic plan. For those aged 30 or older, enrollment is possible only if they qualify for a hardship exemption or an affordability exemption. Hardship exemptions are granted for various challenging circumstances, which may include homelessness, eviction, utility shut-off notices, domestic violence, the death of a family member, or substantial property damage from a disaster. An affordability exemption applies if the lowest-priced health plan available through the Marketplace or an employer costs more than a certain percentage of a household’s income, which is 7.97% in 2025.

Understanding the Costs

The financial structure of catastrophic health insurance plans is characterized by their cost components: premiums, deductibles, and out-of-pocket maximums. Premiums for catastrophic plans are typically lower compared to other health insurance options available through the ACA Marketplace. This reduced monthly payment can be attractive for individuals who are generally healthy and anticipate minimal medical needs. Factors influencing premium amounts include the applicant’s age, geographic location, and tobacco use.

A defining feature of catastrophic plans is their very high deductible. The deductible for these plans is set at the same level as the annual out-of-pocket maximum for all ACA-compliant plans. For 2025, this deductible is $9,200 for an individual, increasing to $10,600 in 2026. This means that, for most medical services, individuals are responsible for paying the entire cost out-of-pocket until this substantial deductible amount is met.

The deductible and out-of-pocket maximum for catastrophic plans are the same amount. After reaching this maximum, the insurance plan typically covers 100% of all covered in-network essential health benefits for the remainder of the plan year. Before the deductible is met, individuals pay the full negotiated rate for most services, though copayments may apply for specific services like primary care visits.

Premium tax credits and cost-sharing reductions, which help lower monthly premiums and out-of-pocket costs for many Marketplace plans, generally cannot be applied to catastrophic health plans. This makes them a less financially advantageous option for individuals who would otherwise qualify for significant federal subsidies on other plan types.

What Catastrophic Plans Cover

Catastrophic health insurance plans, like all plans offered through the ACA Marketplace, must cover a comprehensive set of essential health benefits. Preventive services are a key component of coverage under these plans and are covered at 100% without requiring the deductible to be met. This includes a wide range of services such as routine screenings, immunizations, and annual check-ups.

Beyond preventive care, catastrophic plans also cover at least three primary care visits per year before the deductible is met. While these visits are covered, a copayment may still be required. For other medical needs, such as emergency room visits, hospitalizations, or prescription drugs, coverage typically begins only after the high deductible has been fully paid.

These plans are designed to cover significant medical events, such as serious accidents or sudden, severe illnesses requiring hospitalization. However, they generally do not provide extensive coverage for routine care or ongoing management of chronic health conditions unless the high deductible is first met. This structure means that individuals with chronic conditions or those who anticipate frequent medical appointments may find these plans less suitable for their regular healthcare needs.

How to Enroll

Enrolling in a catastrophic health insurance plan primarily occurs through the Health Insurance Marketplace, which can be accessed via healthcare.gov. The main period for enrollment is the annual Open Enrollment Period. For coverage beginning in 2026, the Open Enrollment Period typically runs from November 1, 2025, through January 15, 2026, in most states.

Individuals who miss the Open Enrollment Period may still be able to enroll if they experience a qualifying life event. These events trigger a Special Enrollment Period, allowing a window of 60 days from the event to apply for new coverage. Common qualifying life events include losing existing health coverage, changes in household size such as marriage, divorce, or the birth or adoption of a child, and moving to a new area.

This typically includes personal details for all household members, such as names, dates of birth, and Social Security Numbers. Information regarding household income is also required to determine eligibility for certain plans or exemptions. Applicants can create an account on the Marketplace website, complete the application, and select a plan that fits their eligibility and needs.