If you can’t afford the monthly premiums on a traditional health insurance plan, catastrophic coverage can be a valuable solution. Available to people under 30 or who meet the government’s criteria for a hardship exemption, catastrophic plans have low monthly premiums but high deductibles and out-of-pocket maximums. Designed to cover you from major accidents or illnesses, catastrophic plans are an affordable safeguard.
If you’re planning on enrolling in a catastrophic health plan, it’s wise to shop around to get the best rates and coverage. We researched 12 insurers that offer catastrophic and short-term catastrophic plans to identify the four best companies based on cost, benefits, and reputation. Here are our top choices.
The 4 Best Catastrophic Health Insurance of 2021
- Best Overall: Blue Cross Blue Shield
- Best for Added Benefits: Oscar
- Best for Virtual Care: Kaiser Permanente
- Best Short-Term Coverage: Pivot Health
Best Overall: Blue Cross Blue Shield
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Blue Cross Blue Shield
Blue Cross Blue Shield (BCBS) is our pick as the best overall provider of catastrophic health insurance because of its vast provider network and benefits.
Large provider PPO network
Blue 365 member discount program
Emergency care covered when traveling outside of the United States
Options and customer service vary by location
Pricing varies by state
Not eligible for the premium tax credit
BCBS is one of the largest insurance companies in the country, insuring one in three Americans. Founded in 1929, BCBS’s structure is made up of 36 different independent, community-based BCBS companies. Because each BCBS company operates independently, they are able to offer customized options to the communities they serve.
BCBS companies have a huge provider network, with over 96% of hospitals and 95% of doctors and specialists contracting with BCBS. BCBS offers multiple catastrophic PPO plans, so you can choose the doctors you like and you don’t need a referral to get specialist care.
BCBS plans may also offer emergency care when you travel outside of the United States, a useful perk if you like to travel.
With BCBS’s Blue365 program, you can get valuable discounts at national and local retailers. Discounts include dental and vision services, fitness gear and apparel, gym memberships, and healthy eating options.
However, BCBS plans, options, and prices can vary widely by location. And, because catastrophic plans are so low cost, you’re not eligible for the premium tax credit. As each BCBS chapter is independent, each has its own National Association of Insurance Commissioners (NAIC) rating and customer service levels can differ from place to place.
BCBS is our top pick because of the number of options you have with the insurer and the large provider network you have access to as a member.
Best for Added Benefits: Oscar
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Oscar
Oscar is our top choice for health insurance with added benefits. You can earn rewards for healthy habits like walking and you have access to a care team to help you manage your health.
Earn rewards for healthy habits
Virtual urgent care available
Each member has access to a care team
Only available in select markets
Smaller provider network
Higher-than-average number of complaints
Oscar is a relatively new company that launched in 2012. It offers unique features like virtual urgent care and virtual primary care. You can book visits with healthcare providers from your home and pay $0.
Oscar has an app that syncs with your Google Fit or Apple Health device. You can earn $1 for every day that you reach your step goals up to $100 per year by walking. In California, members can also earn rewards by reaching their sleep goals.
You also will have access to a care team, which is a team of guides and nurses that will help you find the best and most affordable care near you.
Oscar isn’t available everywhere. For 2021, it will operate in parts of the following states: Arizona, California, Colorado, Florida, Georgia, Kansas, Missouri, Michigan, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, and Virginia.
Because Oscar is so new and is only available in some areas, it has a smaller provider network than some other insurance companies. And, it’s had some growing pains as it expands. In 2019, its National Association of Insurance Commissioners complaint ratio was 5.37, meaning it received five times more complaints than is typical in the industry.
However, Oscar offers unique benefits that make it stand out from other insurers. With its telehealth and rewards program, you can get quality care at a relatively low cost.
Best for Virtual Care: Kaiser Permanente
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Kaiser Permanente
If you are looking for an insurer that offers robust virtual care, Kaiser Permanente is our first choice. You can get same-day care from healthcare providers via phone, email, or video.
Children’s eye exams and glasses covered at no charge
Covers additional health services
Same-day telehealth appointments by phone, email, or video available
Not available in all areas
Dental care not included
Prior authorization may be required for some services
The Kaiser Permanente insurance company has been in operation since 1945, starting as an insurance company for shipyard and steel mill workers. Now, it is a large not-for-profit provider of health insurance with over 12 million members.
With Kaiser Permanente’s catastrophic plans, you can talk to a healthcare professional without visiting an office in-person. You can get same-day appointments with doctors or nurses to deal with issues like sore throats, bladder infections, or allergies. Appointments are available via phone or video. If you have non-urgent health questions, you can contact a healthcare provider via email. Kaiser Permanente also can connect you to specialists through telehealth appointments.
With a catastrophic plan, children can get an annual eye exam and a set of glasses at no additional charge, and the deductible does not apply. A Kaiser catastrophic plan also covers some additional health services, including acupuncture and chiropractic care. Some services and medications may require prior authorization, meaning you may have to try other therapies before the insurer will cover your desired treatment.
Dental care is not included; if you’d like dental coverage, you’ll have to purchase a separate policy.
Kaiser Permanente’s catastrophic plans are not available everywhere. They are only available in parts of California, Colorado, Georgia, Hawaii, Maryland, Oregon, Virginia, Washington, and Washington, D.C.
The NAIC complaint ratio is 1.29, meaning the number of complaints the insurer received is near the industry average.
Kaiser Permanente stands out from other insurers because of its telehealth options. You can get access to healthcare professionals from your own home and get help the same day you request it.
Best Short-Term Coverage: Pivot Health
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Pivot Health
If you need short-term insurance to cover a gap until other coverage begins, Pivot Health is the best option of those we reviewed. It allows you to get multiple quotes by filling out one simple form, and telehealth is included with all plan options.
Receive coverage the day after you apply
Plans available with PPO networks
May be cheaper than other plans
Cheaper plans have a higher-than-average deductible
There are caps on total coverage
Enrollment fees apply
Short-term coverage differs from catastrophic health plans sold through the Health Insurance Marketplace. They tend to be much less expensive; a healthy 25-year-old woman in Florida can get a plan for as little as $80 per month through Pivot Health.
Pivot Health is a short-term insurance marketplace that connects customers to policies underwritten by insurers like The North River Insurance Company and Companion Life.
While other plans make you wait weeks before you’ve covered, Pivot Health’s plans are effective generally the day after you apply for insurance. Most plans are PPO networks, so you can choose your own healthcare provider and see specialists without a referral.
Because short-term coverage is separate from catastrophic plans offered on Healthcare.gov, they have a higher deductible and can deny pre-existing conditions. Depending on the plan you choose, the deductible can be as high as $10,000 per month. There are also caps on how much your insurance company will cover; for lower-tier plans, the limit is $100,000.
In addition to the monthly premium, you’ll also have to pay an enrollment fee of $19.95.
Because Pivot Health is an insurance marketplace, it’s not included in the NAIC’s complaint index.
Pivot Health is best for people who have a temporary lapse in coverage and are looking for affordable short-term insurance. With low premiums, it can help you save money and still protect against major medical expenses.
What Is Catastrophic Health Insurance?
Catastrophic health insurance plans are designed for people who are under 30 or who meet hardship requirements. These plans have low monthly premiums but very high deductibles. As of 2020, the deductible on catastrophic plans is $8,150. You pay for most routine medical expenses on your own, but the plans provide coverage in case of serious emergencies that require significant medical attention.
Catastrophic plans cover the same essential health benefits as other Health Insurance Marketplace plans, and they cover preventative services at no additional cost. If you purchase a catastrophic plan through the Health Insurance Marketplace, you’re also entitled to three primary care physician visits.
Who Should Get Catastrophic Health Insurance?
Catastrophic health insurance policies are inexpensive, but they’re not for everyone.
They’re best for people who are young and healthy, without ongoing health conditions that need regular care. If you cannot afford a traditional health insurance plan, catastrophic plans are a low-cost option that provide coverage in case of accidents or serious illnesses that you’d otherwise have to pay for yourself.
If you have other options, such as employer-offered coverage or a traditional plan through the Affordable Care Act, those insurance plans will offer more comprehensive coverage with much lower deductibles.
If you have any chronic health conditions and require regular doctor visits or treatment, catastrophic health plans will be costly since the deductible is so high. You would likely be better off with a bronze or silver plan purchased through the Health Insurance Marketplace.
What Is the Difference Between Major Medical and Catastrophic Coverage?
Major medical insurance is a term used to describe plans sold on the Health Insurance Marketplace that meet the Affordable Care Act’s requirements. While major medical plans have different tier levels—with different premiums and deductibles—they all cover the same preventative services and essential benefits.
Catastrophic plans are also sold through the Health Insurance Marketplace but have very high deductibles compared to major medical plans. You’ll typically pay out of your own pocket for routine medical care; a catastrophic plan only provides coverage once you’ve paid thousands and met the deductible.
Catastrophic plans aren’t available to everyone; there are age and hardship restrictions.
How Can I Get Catastrophic Health Insurance?
You can purchase catastrophic health insurance plans through the Health Insurance Marketplace at Healthcare.gov, or you can purchase directly from a private insurance company.
To purchase a plan through Healthcare.gov, you need to be under 30. If you are over 30 and think you qualify for a catastrophic plan due to a hardship, you must apply for an exemption before you can select a plan. Applying through Healthcare.gov allows you to compare plans from multiple insurers so you can pick the best plan for your needs.
If you purchase directly through a company, you may purchase short-term insurance—temporary coverage against major accidents or illnesses—without having to meet certain criteria or qualifying for an exemption. However, short-term plans don’t cover pre-existing conditions.
What Does Catastrophic Health Insurance Cost?
The average cost of a catastrophic health plan is $195 per month, but your cost will depend on your location, age, and insurer. That amount is significantly less than what a bronze plan purchased through the Health Insurance Marketplace would cost. As of 2020, the lowest-tier bronze plan costs $331 per month, on average.
Short-term insurance plans are another option that can be inexpensive since they’re meant as temporary coverage and don’t cover pre-existing conditions. Short-term policies typically cost $124 per month.
How We Chose the Best Catastrophic Health Insurance
We researched and evaluated 12 different insurance companies that offer catastrophic and short-term catastrophic plans. We reviewed each company on their plan options, provider networks, cost, additional benefits, and NAIC complaint ratio. Companies that operated in less than three states were eliminated from contention. We ultimately chose four companies that were readily accessible, had quality customer service, and offered an extensive network so policyholders don’t struggle to find care.