Catastrophic Plan

Built for the worst case

Catastrophic plans are a special category of ACA-compliant coverage. They carry low premiums and a deductible equal to the federal out-of-pocket maximum, which is $12,000 for 2027. In plain terms, you pay nearly everything yourself until a major event, and then the plan covers 100% of covered in-network costs for the rest of the year.

Even with that structure, catastrophic plans must cover all essential health benefits, plus:

• In-network preventive care at no cost.
• At least three primary care visits per year before the deductible.

Who can buy one

Catastrophic plans are limited to:

• People under 30.
• People of any age with a hardship or affordability exemption from the Marketplace.

Federal rules expanded hardship eligibility for 2026 to include many people who cannot get a premium tax credit because of their income. If you are over 30 and above the subsidy line, ask whether you qualify for the current year.

HSA eligibility since 2026

Starting in 2026, catastrophic plans qualify for health savings accounts. For 2027, that means up to $4,500 in contributions for self-only coverage. That turns a catastrophic plan into a reasonable strategy for a young, healthy self-employed person who wants to build savings while staying protected.

Example

Aaliyah, 27, just left a corporate job to freelance. She is healthy, rarely sees a doctor, and her income puts her above the subsidy line for 2027. A catastrophic plan gives her:

• A low monthly premium.
• Her annual physical and screenings at no cost.
• Three primary care visits before the deductible.
• A hard cap if she is hospitalized after a car accident.

She also opens an HSA and contributes monthly, building a fund for future care.

The catch

• Premium tax credits cannot be used on catastrophic plans. If you qualify for a subsidy, a bronze plan may end up cheaper than catastrophic.
• Families are rarely a fit because each person needs to qualify.
• Moderate-cost care like specialist visits, imaging and brand-name drugs is mostly on you.

Marketplace vs private plans

Catastrophic plans are ACA-compliant and include all essential benefits, pre-existing condition protections and the federal cost cap. Some private products marketed for young, healthy people, such as short-term plans, cost less but lack these protections and can exclude conditions. A catastrophic plan is a true safety net; many cheap private alternatives are not.

Read our full catastrophic health insurance guide and our guide to turning 26 and health insurance. To see whether a catastrophic or bronze plan fits better, get a quote.