What is "catastrophic health insurance" designed to cover?

Catastrophic health insurance is specifically designed to provide coverage for serious accidents or illnesses. This type of insurance offers a lower premium because it is intended to protect individuals against financial ruin in the event of a major health crisis, rather than covering day-to-day healthcare needs or minor medical expenses.

Typically, catastrophic plans include a high deductible, meaning that insured individuals must pay out-of-pocket for their healthcare costs up to that deductible before the insurance kicks in. Once the deductible is met, the policy usually covers a significant portion of the medical expenses, which is critical in the case of severe health events that can lead to substantial hospital bills or treatment costs.

Unlike plans focused on everyday healthcare needs or preventative care, catastrophic health insurance is targeted at high-cost situations, thereby ensuring that individuals have a safety net for significant health challenges without the burden of high monthly premiums. This makes it particularly appealing for younger, healthier people who are less likely to require regular medical care but still want coverage for unforeseen emergencies.