About ‘catastrophic’ health insurance

“Catastrophic” health plans are insurance in its purest form: Something goes very wrong — such as a heart attack or an extended hospital stay — you’re protected from financial ruin. Otherwise, you’re footing much of the bill yourself, with a few exceptions.

emergency room sign at hospitalCatastrophic policies “basically protect you from worst-case scenarios,” the federal Obamacare site says. Think of them as the term life insurance policies of health care.

The Affordable Care Act provides for catastrophic coverage for those under age 30, on the theory that the young are far less likely to suffer major unexpected health crises than older people.

On California’s Obamacare web site, a 25-year-old might be able to buy “minimum coverage” for about $150. The deductible is the highest on offer, $6,350 for individuals.

Here’s the catch for many young adults: These catastrophic policies do not allow for government “premium assistance,” in many cases making them worse deals than high-deductible plans offered under the bronze metal tier level.

Catastrophic plans under Obamacare aren’t entirely bare bones — they do cover three visits with your doctor each year, as well as basic preventative health services (HIV screening, flu shots, blood-pressure checks, etc.).

People over 30 can buy the coverage under some circumstances, for which they receive hardship exemptions. This exemption is granted in cases when coverage is deemed unaffordable based on your expected income.

On Dec. 19, the Obama administration said that people whose policies were cancelled as being outdated — not meeting the essential health benefits — could apply for the exemption that will allow them to buy catastrophic coverage. (They also do not have to buy insurance for 2014.)

Covered California will be selling the catastrophic coverage to those who qualify for the temporary hardship exemption because of cancelled insurance. Covered California chief Peter Lee said the plans were not “a good value,” considering their limitations.

Access the health insurance hardship exemption form.