Catastrophic Plans, otherwise known as catastrophic insurance, is a type of health insurance coverage created by the Affordable Care Act. It is only available to individuals under age 30 who cannot afford other health insurance coverage. This plan is limited to individuals and is not available for families. In order to enroll in a catastrophic plan, an individual must obtain certification from an Exchange that he or she does not have an affordable coverage option and qualifies for a “hardship exemption.”
A catastrophic plan provides the same essential benefits as the other health insurance plans created by the Affordable Care Act but requires a high deductible to be met before the plan pays for essential health benefits. However, the deductible does not have to be paid for the following:
Primary care visits are visits to the enrollee’s doctor, or other healthcare provider, who serves as the principal point of consultation for healthcare services. Preventative care is the services provided to prevent illness or disease from occurring.
Catastrophic plans should typically cost less than the entry-level Bronze Plan within the Affordable Care Act. However, catastrophic plans do not qualify for premium tax credits and cost-sharing reductions.1 Before enrolling in a catastrophic plan, an individual should confirm that he or she would not pay less for another qualified health plan that is eligible for premium tax credits and cost-sharing reductions.
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1 Timothy Jost. "Implementing Health Reform: The Benefit And Payment Parameters Final Rule." HealthAffairs Blog. (March 3, 2013). http://healthaffairs.org/blog/2013/03/03/implementing-health-reform-the-benefit-and-payment-parameters-final-rule/. Accessed July 12, 2013.