Catastrophic plan

What is a Catastrophic health insurance plan?

Although the term “Catastrophic plan” has long been used as a generic catch-all phrase to describe health insurance plans with high deductibles and little coverage for routine care, the Affordable Care Act assigned strict parameters to the term:

Catastrophic plans:

• are only available to certain applicants,
• have deductibles equal to the maximum annual out-of-pocket limit,
• pay at least part of the cost of up to three primary care visits before the deductible is met,
• cannot be used with premium subsidies,
• are not offered by all carriers and are not available in all areas (in 2026, they're available in at least some parts of 36 states and DC)¹

The specific requirements for Catastrophic plans are in the text of the ACA, section 1303(e).²

Are Catastrophic plans less expensive than Bronze plans?

This depends on the location and the specific plans in question. The short answer: Historically, Catastrophic plans were often less expensive than Bronze plans, although not always. And since not all carriers offer Catastrophic plans, the lowest-cost carrier in a given area doesn't always offer Catastrophic plans. And for 2026, changes in the availability of Catastrophic plans resulted in some insurers significantly increasing the premiums of these plans.

Here are the details, including some example premiums for 2026:

One of the reasons Catastrophic plans have tended to be less expensive is that for the ACA’s risk adjustment program, Catastrophic plans are in a separate risk pool from the metal-level plans,³ even though they’re in the same general shared risk pool.⁴ (The risk adjustment program transfers funds from carriers that insure healthier enrollees to carriers that insure sicker enrollees. This helps to stabilize the overall market, and removes the incentive for carriers to design plans that appeal more to healthy enrollees.)⁵

This means that within a state, Catastrophic plans transfer risk adjustment funds with other Catastrophic plans, but not with metal-level plans. This is one of the reasons Catastrophic plans have tended to have lower prices than Bronze plans. (The coverage they offer is quite similar to Bronze plans: Bronze plans cover an average of 56% - 62% of costs for a standard population,⁶ while Catastrophic plans must cover less than 60% of average costs,⁷ with the same maximum out-of-pocket limit that applies to other plans.

So because of the way the plans are grouped for risk adjustment, and because most Catastrophic plan enrollees have historically been under age 30 and fairly affluent – since income-based subsidies cannot be used with Catastrophic plans – these plans have generally had lower premiums than Bronze plans.⁸

However, that changed somewhat for 2026, as access to Catastrophic plans was expanded (details below; the expansion has since been blocked by a court ruling). As a result, insurers were allowed to refile premiums for 2026 coverage during a short window in late September 2025, to account for the fact that Catastrophic plans would be more widely available to older enrollees.⁹ As an example of the impact, North Dakota’s insurance department clarified that the expanded access to Catastrophic plans “resulted in much higher rate increases for 2026 than was originally anticipated for those plans."¹⁰

But there is considerable variation from one area to another. For example:

• A 50-year-old in Orlando, Florida, who didn’t qualify for a 2026 Marketplace subsidy could get a Catastrophic plan for as little as $462/month, whereas the cheapest Bronze plan was $700/month.
• On the other hand, if this same person was in Houston, Texas, they could get a Bronze plan for as little as $523/month, but would have had to pay $628/month to get the cheapest Catastrophic plan.¹¹

The takeaway point: Don’t assume Catastrophic plans will be the cheapest option, even if you’re not eligible for a Marketplace subsidy. It will depend on where you live and the plans that are available to you.

Can I use premium subsidies to buy a Catastrophic plan?

No. An enrollee in a Catastrophic plan is not eligible for premium subsidies¹⁶ (and cost-sharing subsidies are also not available for Catastrophic plans, since those can only be obtained if you choose a Silver plan).

Depending on your income, you may be eligible for a premium subsidy that you could apply towards a metal-level plan. This may make a metal-level plan more affordable than a Catastrophic plan.¹⁷

Who can enroll in a Catastrophic plan?

Catastrophic plans are only available to people under age 30, or people 30 and older who qualify for a hardship/affordability exemption.¹⁸

Starting with the 2026 plan year, CMS made changes to allow more people to qualify for an automatic hardship exemption and thus be eligible to enroll in a Catastrophic plan if they weren't eligible for Marketplace subsidies.¹⁹ And this expanded hardship exemption was codified by CMS in 2026 so that it would be available nationwide starting July 20, 2026.²⁰ But the expanded access to Catastrophic plans was blocked by a court ruling in mid-July 2026.

In the same ruling mentioned above about maximum out-of-pocket limits, the judge also stayed the provision that had expanded access to Catastrophic plans based on a person's ineligibility for Marketplace subsidies.¹⁵

As a result, people who are 30 or older can once again only purchase a Catastrophic plan if they obtain a hardship or affordability exemption certificate first.¹⁷

The first Trump administration previously expanded access to hardship exemptions in April 2018,²¹ allowing exemptions for people in areas where all plans cover abortions, areas where only one insurer (or zero insurers) offers plans in the exchange, or where a personal hardship is created due to the plan options available in the exchange.

In particular, the provision for people in areas where just one insurer offers plans in the exchange made a hardship exemption available to far more people, allowing them to potentially purchase a Catastrophic plan (albeit without premium subsidies, making this a realistic alternative only for people who aren’t otherwise eligible for subsidies). But insurer participation in the exchanges has increased significantly since 2018, with very few enrollees currently having access to just one insurer’s plans.²²

Can I contribute to an HSA if I have a Catastrophic plan?

Starting in 2026, you can contribute to a health savings account (HSA) if you have a Catastrophic plan purchased through the health insurance Marketplace, and no additional health coverage. This is due to Section 71307 of H.R.1²³ (formerly called the "One Big Beautiful Bill Act," and now referred to as the "Working Family Tax Cut Legislation"),²⁴ enacted in July 2025. Before 2026, enrollment in a Catastrophic plan did not allow a person to contribute to an HSA.

How many people enroll in Catastrophic plans?

During the open enrollment period for 2026 coverage, 67,489 people enrolled in Catastrophic plans through the Marketplaces nationwide, out of more than 23.1 million total enrollees.²⁵

A little more than 20,000 of these enrollees were able to purchase Catastrophic plans because of the expanded access the Trump administration put in place in the fall of 2025 (the rest were mostly under 30, but a small fraction of enrollees obtained traditional hardship or affordability exemption certificates).²⁶

Catastrophic plans amounted to about 0.3% of total Marketplace enrollment for 2026, which was up only slightly from the 0.2% the year before, when 54,109 people enrolled in Catastrophic plans, out of more than 24 million exchange enrollees nationwide.²⁷

(People can enroll in Catastrophic plans outside the exchange, but off-exchange enrollment is quite low across all types of plans, and the same eligibility rules apply to Catastrophic plans on-exchange or off-exchange.)

So although the Trump administration took steps to expand access to Catastrophic plans for 2026 (and had projected that 3 million people would select these plans as a result),²⁸ Catastrophic plans continued to account for only a tiny fraction of total Marketplace enrollment in 2026, with only a minuscule increase from 2025.

Why is Catastrophic plan enrollment so low?

There are various reasons that so few people enroll in Catastrophic plans, including:

• Most Marketplace enrollees are subsidy-eligible. In 2026, more than 20 million of the 23.1 million Marketplace enrollees were eligible for income-based premium subsidies.²⁹ These enrollees would have had to forfeit their subsidy to select a Catastrophic plan.
• Catastrophic plans aren’t always the lowest-cost option for people who don’t get premium subsidies. This was already true in some areas before 2026, but it was even more widespread in 2026, because carriers were allowed to refile rates for Catastrophic plans after CMS announced the expanded eligibility rules (details above). For example, in Houston, Texas, a 45-year-old who wasn’t eligible for Marketplace subsidies had access to two Catastrophic plans in 2026, with monthly premiums for $507 and $647. But they had access to numerous Bronze plans with premiums starting as low as $423/month.³⁰
• In some areas, there are no Catastrophic plans available. There are 14 states where no carriers offer Catastrophic plans in the Marketplace anywhere in the state for 2026.¹ In the rest of the states, some carriers (but usually not all) offer Catastrophic plans, but might not have coverage areas that include the whole state. And in some areas, the lowest-cost insurer doesn’t offer Catastrophic plans, so even if other insurers do, the Bronze plan from the lowest-cost insurer might be less expensive than another insurer’s Catastrophic plan.
• Eligibility is limited. Although Catastrophic plans were temporarily available to people age 30 and older who weren't eligible for ACA subsidies, these plans (even in areas where they were available) were not automatically displayed by plan comparison tools in state-run Marketplaces. Since a court has stayed the federal rule change that granted Catastrophic plan access to more people, enrollment in these plans is likely to decline for 2027, as the regular process for obtaining a hardship or affordability exemption will have to be followed by people who are 30 or older if they wish to enroll in a Catastrophic plan.³¹