What Do Catastrophic Health Plans Cover?

Catastrophic health insurance plans serve as a financial safeguard, primarily designed to protect individuals from the substantial costs associated with severe, unexpected medical emergencies. These plans are characterized by their low monthly premiums, which make them an affordable option for some. However, this lower upfront cost is balanced by a considerably high deductible, meaning individuals pay for most medical services out-of-pocket until a significant threshold is met. Understanding the specific coverage and limitations of these plans is important for those considering them as a health coverage option.

What Catastrophic Plans Are

Catastrophic health plans are a distinct type of health coverage established under the Affordable Care Act (ACA). They are built around a high deductible, which is the amount an individual must pay for covered medical services before the insurance company begins to contribute significantly to costs. For 2025, this annual deductible for an individual is $9,200, which also represents the maximum out-of-pocket limit for the year.

These plans are intended to provide a financial safety net against unforeseen, high-cost medical events, such as serious accidents or severe illnesses. They are not designed to cover routine medical expenses, as individuals are responsible for nearly all costs until the substantial deductible is satisfied. The design of catastrophic plans reflects a trade-off: lower monthly premiums in exchange for the responsibility of paying a large sum out-of-pocket before comprehensive coverage activates.

Core Coverage of Catastrophic Plans

Once the high deductible of a catastrophic plan is met, these plans provide comprehensive coverage for all Essential Health Benefits (EHBs). EHBs encompass a broad range of services fundamental for health and well-being, including:

Ambulatory patient services, which cover outpatient care like doctor’s visits and same-day surgeries.
Emergency services for sudden, urgent medical needs.
Hospitalization, including costs for inpatient care.
Comprehensive maternity and newborn care, encompassing prenatal, childbirth, and postnatal services.
Mental health and substance use disorder services, including behavioral health treatment.
Prescription drugs, although the specific formulary or approved list of medications can vary by plan.
Rehabilitative and habilitative services and devices, which help individuals regain or improve skills for daily functioning.
Laboratory services for diagnostic testing.
Pediatric services, including oral and vision care for children.

Catastrophic plans cover certain preventive services at no cost, even before the deductible is met. Examples include routine immunizations such as flu shots, and screenings for conditions like high blood pressure, cholesterol, and certain cancers.

Additionally, catastrophic plans cover specific well-woman visits and offer counseling services like smoking cessation and weight management. Beyond preventive care, these plans also cover at least three primary care visits per year, with some portion of the cost covered even if the deductible has not yet been reached.

Services Not Covered by Catastrophic Plans

Catastrophic plans are not designed for individuals who anticipate needing frequent medical care for routine issues. Most common medical services, such as regular doctor visits for minor illnesses, non-emergency specialist consultations, and most prescription medications, will be paid for entirely by the enrollee until the high deductible is met.

The financial structure of these plans implies that individuals seeking care for everyday health concerns will bear the full cost. Therefore, if someone expects to use their health insurance regularly for routine check-ups beyond the limited preventive and primary care visits, or for managing ongoing health conditions, a catastrophic plan may result in significant out-of-pocket spending throughout the year. These plans are specifically for protection against major, unforeseen medical costs rather than consistent, lower-level healthcare needs.

Enrollment and Eligibility

Eligibility for catastrophic health plans is restricted, primarily targeting younger individuals or those facing significant financial challenges. Individuals under the age of 30 are eligible. For those aged 30 and older, eligibility requires qualifying for a hardship exemption or an affordability exemption, demonstrating that other health coverage options are not financially feasible.

These plans can be purchased through the Health Insurance Marketplace or directly from insurance providers. Catastrophic plans do not qualify for premium tax credits, which are government subsidies designed to lower monthly insurance premiums for eligible individuals. While monthly premiums are lower than other plans, the absence of financial assistance can make them less attractive for those who might otherwise qualify for premium support.