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Catastrophic Health Insurance – Do You Need It?

A Catastrophic health insurance policy is all you need—if you hardly ever use it. Deductibles are high and premiums are low.

To be eligible you must be:

  • Under the age of 30, OR
  • Be eligible for a hardship exemption

How Catastrophic Health Insurance Works

Think of it as a health back-up plan. You’re young and healthy, and probably can’t afford a more typical plan. With catastrophic coverage, you’re banking on remaining healthy and only pay a low monthly premium. Then, there’s the high deductible, a good reason to not get sick.

The Break-Down

Catastrophic insurance is in the final, least expensive tier in the state or federal Affordable Care Act (ACA) Marketplace, Bronze. It breaks down like this:

  • A low premium, so you don’t have to pay as much every month.
  • The policy also has a high deductible, which means it’ll take you longer to meet. You’ll have to p you-of-pocket. When you hit the maximum deductible, your policy pays 100 percent of what is covered.
  • Designed for those who are young and healthy and only want low-cost, minimal coverage.
  • You might qualify for Catastrophic insurance if you are a experiencing a hardship.

How Much Does It Cost?

Catastrophic plan deductible amounts are set by government – $8,550 in 2021. You must pay for all health care expenses until they total the amount of the deductible. In this case, the maximum you pay is $8,550 before insurance takes over medical the rest of the enrollment year.

What Does Catastrophic Insurance Cover?

Catastrophic health insurance doesn’t cover much of what is available in a regular policy. Under a Catastrophic plan you would receive coverage:

  • Three primary care visits a year
  • Preventive care services
  • As with all ACA policies, these essential medical benefits services are covered:
    • Hospitalization
    • Pregnancy
    • Prescription drugs
    • Mental health services
    • Rehabilitation services
    • Pediatric services
    • Preventive and wellness care

What Is Medicare Catastrophic Coverage?

Medicare Catastrophic coverage is under a Medicare drug policy. You pay a small coinsurance cost for covered drugs once you pay more than $5,000 out-of-pocket.

How to Qualify for Catastrophic Health Insurance?

You must be under the age of 30 or eligible for a hardship exemption. Hardship examples include:

  • You are homeless
  • A utility company sent you a shut-off notice
  • You were evicted
  • You filed for bankruptcy
  • A family member died
  • You have sizeable medical debt you are unable to pay
  • You were a victim of domestic abuse
  • A disaster, natural or otherwise, has substantially damaged your property

How to Buy Catastrophic Health Insurance

To obtain a Catastrophic health insurance policy, apply through your state’s health insurance exchange. You can find more information and fill out an application at HealthCare.gov.

Insurance Reference Guides

Where you live may affect your coverage options. Our reference guide will assist you in findoing plans available in your state.

Insurance Terms Glossary

From "absolute liability" to "written premiums," we've done the work for you to define commonly used insurance terms.

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EInsure Services, Inc., Insurance Services, Chicago, IL

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