What is a marketplace catastrophic plan, who can buy it, and what does it cover?

First off, what is this so-called “catastrophic” plan? It is actually a type of health insurance that can protect you from unexpected, high medical costs; it acts like an emergency net, preventing you from falling into the deep end, financially speaking, because of high medical costs that you will incur due to emergency treatments. These kinds of plans can cover hospitalization or treatment for sudden serious illnesses or serious injuries resulting from accidents.

The term “catastrophic” is not always used (if ever) when offering these kinds of insurance, they are usually called hospital-only or short-term plans instead. These kinds of plans can only cover emergency hospitalization and other immediate needs, it will not include prescription medication, regular check-ups, immunizations and the like.

Even though the monthly premiums for catastrophic plans are significantly lower than those of other insurance plans, the deductibles are usually much higher. This high deductible is the reason why catastrophic plans are better suited for people who are relatively young and healthy (rarely visits a doctor for treatment purposes), or is expecting to receive a better, employer-based health insurance within the next 6-12 months.

Who are eligible for it? According to the rules of the Marketplace, people who are 30 years old and younger, have no prior medical conditions, and are not currently taking any prescription medication are eligible for catastrophic insurance. But there are exemptions; for instance, if you are over 30 and your income is low enough to exempt you from paying the penalty for not having health insurance, then you qualify for catastrophic plans.

Another, easier way of finding out if you can purchase catastrophic insurance plans is if it shows up in the list of plans you are qualified for. After you finished filling out your application for the Marketplace and catastrophic plans appear on the list of insurance plans that you qualify for, then you can purchase them; if nothing appears, then that just means you are not eligible.

Keep in mind that even though catastrophic insurance plans have much lower premium costs as compared to other types of insurance, they do have a higher deductible. Basically, this kind of insurance is only for emergencies or in worst-case-scenarios like horrid accidents that leaves you in need of serious medical treatment; things that would usually cost a lot of money and would leave you under a ton of debt should you manage to recover.

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