Can I buy a catastrophic plan under the new law?

December 21, 2013

Who can buy a "catastrophic" plan?

 

Under the new law, a "catastrophic" plan will not be an option for most buyers. The Affordable Care Act limits your out-of-pocket risk on most new health plans, making catastrophic plans not compliant with the new law for most people.

 

However, there will be a "catastrophic" health plan available in the exchange starting in 2014. People under 30 years old or those who have limited incomes and qualify for a hardship exemption may be able to buy the "catastrophic" to save premium.

 

December, 2013 law update:

 

President Obama annouced that all consumers, regardless of age, will be able to buy a catastrophic plan in 2014 to accomdate those who had their health insurance cancelled. You can determine if policies are unafforable in your area (hardship excemption), and if you deem they are too expensive, you can buy a catastrophic plan.

 

BUT, be sure to look closely at the premiums before making your choice. In most areas, catastropic plans are priced very similarly to Bronze plans. Bronze plans would have a lower out-of-pocket cost when you use your plan. If you qualify for a tax subsidy (or, amount of money the goverment will pay each month to your private insurance company to make your plan affordable based on your household income and family size), you cannot apply the subsidy to a catastropic plan. So many consumers might prefer to enroll in a Bronze plan instead of a catastrophic plan, even when given the option.

 

What is a "catastrophic" plan?

 

It protects you from very high limited costs, but asks you to incur for expenses than other, more comprehensive plans (Platinum, Gold, Silver, Bronze) in the marketplace. A catastrophic plan generally requires you to pay a big portion of your health costs upfront and mainly provides protection against very large claims and worst-case scenarios.

 

Catastrophic plans can still provide preventive care at no cost and cover some primary care office visits.

 

Can I qualify for reduced premiums for a "catastrophic" plan?

 

If you decide to get a catastrophic plan through the exchange, you will not be able to qualify to lower that premium or the out-of-pocket expenses based on your income like you can with more comprehensive options (Platinum, Gold, Silver, Bronze) in the exchange.

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