What characterizes "catastrophic" health insurance?

Catastrophic health insurance is designed primarily to protect individuals against very high costs that arise from serious health events. The defining feature of such plans is their structure of having a high deductible, which means that the insured must pay a significant amount out-of-pocket for healthcare expenses before the insurance coverage kicks in. This results in lower premium costs compared to more comprehensive plans.

These plans are typically aimed at young and healthy individuals who do not expect to incur many medical expenses and are looking for a way to safeguard themselves against unexpected emergencies, such as severe illness or accidents. If the insured does need to use their insurance, once the deductible is met, catastrophic plans generally cover essential health benefits, but they still require the insured to pay a certain percentage of costs for a limited number of visits or services.

Other options suggest attributes that do not align with the fundamental purpose and structure of catastrophic plans. Options proposing low deductible plans, comprehensive coverage of all healthcare costs, or limitations strictly to hospital stays fail to capture the essence of the high-deductible, low-premium model tailored for unexpected, significant health needs that define catastrophic health insurance.