Catastrophic Health Insurance

Not everyone can afford to pay for health insurance, and that can lead to a big financial burden during medical emergencies. Catastrophic health insurance plans help bridge the gap by providing low monthly premiums and coverage for emergency medical care. If you’d like more information on this type of coverage, we’ll walk you through everything you need to know in this guide.

Quick Look: Best Catastrophic Health Insurance

• Best for Member Support: Aetna
• Best in Global Coverage: Cigna
• Best for Nationwide Coverage: Blue Cross Blue Shield
• Best for Same-Day Coverage: UnitedHealthcare
• Best for Access to Specialists: Kaiser Permanente

5 Best Catastrophic Health Insurance Companies

Now that you know more about how catastrophic health insurance coverage works, you might be curious about how to get health insurance for this type of coverage. The application process is similar to applying for traditional health insurance and is often through many of the same providers. If you need help figuring out which provider best suits your needs, take a look at our breakdowns of the top 5 best catastrophic health insurance companies in the country.

1. Aetna

Aetna is a powerhouse when it comes to health insurance and provides the most well-rounded insurance options when it comes to price, customer service and selection. Not only does Aetna offer low-cost catastrophic insurance options, but it also has a total of 70 plans to choose from overall. It also offers an online health screening tool that can help you assess your risk for potential complications or diseases. Aetna’s website also offers wellness coaching, personal health information and mental health and mindfulness exercises. 

Different Aetna plans are offered throughout different states.

2. Cigna

Cigna is a big name in the health insurance world and is highly regarded for its large selection of plans and services. It has a high customer satisfaction rating and is continuously ranked highly among competing insurance providers. Cigna offers affordable catastrophic plans and also has an online health and wellness knowledge center. This online hub provides valuable medical insights and answers to commonly asked questions. Cigna also offers a 24/7 service hotline to answer specific medical questions. 

On the downside, Cigna is only offered in 10 states: Arizona, Colorado, Florida, Illinois, Kentucky, Missouri, North Carolina, Tennessee, Utah and Virginia. Eligible counties within these states vary.

3. Blue Cross Blue Shield

Blue Cross Blue Shield offers coverage to 1 in 3 Americans. They’ve been around since 1929 and is a trusted name in the health insurance industry. It offers a variety of plans and options to pick from, all with different benefits and incentives.

Even if you’re only shopping for catastrophic health insurance, you’ll typically get the most bang for your buck with this provider. It also offers a variety of online services including an online portal to find physicians and schedule appointments.

4. UnitedHealthcare

UnitedHealthcare insures 13% of all Americans, making it the largest healthcare provider in the country. It is well known for its easy-to-use online system and has over 900,000 medical professionals in-network, making costs more affordable.

UnitedHealthcare allows you to make appointments online, which you can do for preventive services with catastrophic care. It also offers 24/7 online medical assistance, allowing nurses and doctors to answer your questions completely online. You can also attend doctors appointments via virtual visits, without ever leaving your home.

5. Kaiser Permanente

If your bottom line for catastrophic health insurance comes down to cost, Kaiser Permanente may be the right provider for you. It offers some of the most affordable premiums and lowest deductibles (even for catastrophic insurance) on the marketplace. It also has programs specifically designed to help low-income applicants receive catastrophic or traditional health insurance at affordable prices. 

Kaiser Permanente currently offers coverage in 8 states: California, Colorado, Georgia, Hawaii, Maryland, Oregon, Virginia and Washington.

What is Catastrophic Health Insurance?

Catastrophic health insurance is a type of insurance plan that provides coverage for emergency medical situations only. You could use catastrophic health insurance for visits to the hospital emergency room. Many types of catastrophic health insurance also cover a certain number of visits to your primary physician, as well as preventive care, like flu shots and annual checkups or screenings.

What makes catastrophic health insurance different from typical health insurance is the limitations on primary care and prescription expenses. This type of insurance is also generally a more affordable health insurance option, which is why it’s often considered by low-income consumers.

While emergency care is the primary expense covered by catastrophic health insurance, these services are typically not covered until you’ve met your deductible.

Who Qualifies for Catastrophic Health Insurance?

There are limitations as to who can qualify for catastrophic health insurance and some factors you should consider before making this purchase. Anyone under the age of 30 can qualify for catastrophic health insurance without any financial limitations. If you’re over 30, you’ll need to meet specific income requirements, also called hardship exemption, which can vary by location and provider.

You can also qualify if you’re facing one of these common exemptions:

• Bankruptcy 
• Homelessness
• Domestic violence
• Home foreclosure
• Fire or other severe property damage
• Eviction or utility services being shut off

Currently, there are 6 states that do not participate in state-level health insurance catastrophic plans. They include:

• Alaska
• Indiana
• Louisiana
• Mississippi
• Rhode Island 
• Wyoming

If you live in one of these states, you should instead opt for the lowest level health care plan (often Bronze) as alternative coverage.

Do You Need Catastrophic Health Insurance?

If you already have health insurance, you likely do not need to enroll in catastrophic health insurance. However, if you’re looking to update your health insurance policy or if you do not currently have health insurance, there are a few factors you should consider before purchasing catastrophic health care.

You can’t afford traditional health insurance. If you’re looking for a more affordable option to traditional health insurance, catastrophic health insurance can help cover preventive care costs and keep you protected in case of a medical emergency. Having catastrophic health insurance will also prevent you from having to pay the no insurance tax penalty.

You don’t currently have health insurance. Even if you never go to the doctor, it can be smart to have a preventive measure in place. Not only will you be exempt from paying the tax penalty, but you’ll also have extra reassurance in case the worst were to happen.

Your current deductible is too high. If your current health insurance plan has a high deductible, you may be able to save money with a catastrophic health insurance plan. You’ll need to do your own research and comparison among providers before making this decision. 

How Much Does Catastrophic Health Insurance Cost?

Cost is a major factor that determines which type of health insurance plan you opt into, and it’s no different with catastrophic health insurance. 

Currently, catastrophic health insurance under the Affordable Care Act (ACA) has high deductibles equal to the average out-of-pocket cost under the ACA. This equals $8,150 for a single applicant in 2020. That means you would be responsible for paying up to this deductible amount before your insurance would begin covering expenses. While the deductible is high, this type of insurance can still save you tens of thousands in hospital visits and stays if a medical emergency were to strike. 

Hospital stays in the U.S. cost $15,734 on average in 2017. In this case, you’d save $7,584 in medical expenses by obtaining a catastrophic health insurance policy.

Premiums for catastrophic health insurance are less than traditional health insurance, which is why they appeal to so many young or low-income Americans. The average cost of health insurance premiums for individuals averages $400 per month, while family plans average $600 (for a family of 4). Your catastrophic health insurance premium would be much lower than these averages, though the price fluctuates depending on your city and insurance provider.

When deciding if purchasing catastrophic health insurance is a good investment for your future, it’s important to weigh the average expensive costs of hospital stays with the anticipated monthly cost of your insurance premium. Ultimately, paying extra money per month could save your finances if the worst were to occur.

The best way to determine the cost of catastrophic health insurance in your area is by getting a custom quote.

Get Catastrophic Health Insurance Without Breaking the Bank

If you’re worried about the high cost of traditional health insurance, catastrophic health coverage can offer you peace of mind for a fraction of the cost. Be sure to look into catastrophic health insurance requirements, and if you meet them, shop around for a provider that best meets your needs. If you want to get a customized quote on catastrophic health insurance, Benzinga can help.

Frequently Asked Questions