Emergency Health Insurance in the USA: the Catastrophic Plan

Catastrophic health insurance is a low-cost option in the States designed to protect you from major medical expenses. The upside: the premiums are very low. The catch: the deductibles are high, and until you reach yours, you pay most of your medical costs out of pocket.

If you can't afford US health insurance through your employer or another provider, you still have options. You may be able to take out a basic plan that covers essential health benefits for unexpected illness or accidents. Before you sign up, make sure you understand how these plans work and what they will really cost you.

1US catastrophic health insurance at a glance

• Catastrophic health insurance is a low-cost plan that covers very few medical expenses until you reach a high deductible.
• These plans are only available to people under 30, people with a hardship exemption, or people who can't afford any other coverage.
• Once you've met the high deductible, a catastrophic plan covers all the essential benefits of a standard health plan.
• Catastrophic plans don't qualify for government tax credits or subsidies.

2What is catastrophic health insurance?

Catastrophic health insurance plans (sometimes called major medical insurance) are meant to protect you from extreme costs when a serious health event strikes. Under the Affordable Care Act (ACA), they must cover the essential minimum benefits. Usually, though, you face high out-of-pocket costs before you reach your (often very high) deductible.

Unlike some standard plans, catastrophic plans pay for very little before you reach your deductible. That means you won't get much help with copays, prescription costs and the like.

Of course, a serious accident could push you past your deductible quickly, and then you'd be covered. But by that point you'll already have spent a lot of money. On the plus side, the low premiums offset part of those high costs.

Under the ACA, the maximum deductible for all individual catastrophic plans was $8,150 in 2020; for plan year 2026, the cap is $10,600. That's the most you would have to pay out of pocket in a worst-case scenario.

Catastrophic plans aren't open to everyone, though. They're only available to people who are:

• under 30
• eligible for a hardship exemption
• unable to afford coverage through an employer or any other option on the market.

3What does US catastrophic health insurance cover?

Like every US plan offered under the ACA, catastrophic plans must cover certain preventive services free of charge, whether or not you've met your deductible. These typically include vaccinations and screenings (here's the full list of services included at no cost).

Catastrophic plans must also cover at least three visits to your primary care doctor before you've reached your deductible.

Beyond these services, you pay your medical expenses out of pocket until you've met your agreed deductible. After that, the catastrophic plan must cover the same essential health benefits as any other plan on the market. These include:

• Outpatient care
• Emergency services
• Hospital stays
• Pregnancy, maternity & newborn care
• Mental health and substance use services
• Prescription drugs
• Rehabilitation services
• Lab services
• Preventive and wellness services
• Pediatric services
• Additional benefits such as contraception or breastfeeding support
• Dental or vision coverage (depending on each state's minimum coverage rules)

Once you've reached your deductible, you no longer pay any coinsurance or copays for any of these services.

Availability and pricing of catastrophic plans vary by insurer and by state.

4Catastrophic plans & Health Savings Accounts (HSA)

If you're working and your only coverage is a high-deductible plan like this, you can pair it with a Health Savings Account (HSA). An HSA lets you set money aside tax-free to spend on medical costs, which helps you cover everything you have to pay yourself under a catastrophic plan.

5Do you need US catastrophic health insurance?

Catastrophic health insurance is ideal if you can't afford a standard US health plan but still want coverage for emergencies. A catastrophic plan may be right for you if you:

• don't see a doctor regularly
• need lower-cost health insurance
• don't want to pay smaller health costs out of pocket

Before you choose a US catastrophic plan, there are a few things to weigh. For one, your deductible and out-of-pocket costs will likely be higher than with a standard plan.

It's also important to know that there are no subsidies under the ACA for catastrophic plan premiums. So if you qualify for a subsidy, a traditional Bronze or Silver plan may cost you less than a catastrophic plan while covering more.

Whichever plan you choose, make sure you could pay the maximum deductible out of pocket if the worst happens. As with other US health plans, you can only sign up for catastrophic coverage during open enrollment (usually before the turn of the year) or after a "qualifying event" such as a marriage, a death or a birth.

For more on catastrophic health insurance in the USA, visit HealthCare.gov, a US government service. For an overview of medical care, see our page Healthcare in the USA.

You'll find more on US health insurance here. And here are the key US health insurance terms, explained simply.

In short

• Catastrophic health insurance has very low premiums and a high deductible. For plan year 2026, the cap is $10,600.
• It's open to people under 30, people with a hardship exemption and anyone who can't afford other coverage.
• Before the deductible, it pays for certain preventive services and at least three primary care visits; after that, it covers the essential health benefits like any other plan.
• Catastrophic plans get no ACA subsidies. If you qualify for one, a Bronze or Silver plan is often cheaper.
• You can only sign up during open enrollment or after a qualifying event.

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