Affordable Care Act
The Affordable Care Act (ACA or Obamacare) created a class of major medical health insurance plans for individuals and families where all of the policyholders are under the age of 30.
Prior to the ACA, the term “catastrophic health insurance” was used more liberally to describe a much wider variety of health insurance plans and medical indemnity plans all of which were constructed to provide an emergency safety net to protect you against unexpected medical costs.
By law, a major medical catastrophic health plan must meet all of the ACA’s coverage requirements, but it will only cover three primary care visits per year before the plan’s deductible is met. In exchange for higher out-of-pocket costs, the monthly payment for catastrophic health plans are typically lower what one will pay for a major medical plan with a metallic rating, like a Bronze, Silver, Gold or Platinum health plan.
Catastrophic plans differ from other major medical plans in a few ways:
Individuals with, or without major medical health insurance may want to consider other forms of health insurance that provide protection from high out-of-pocket costs for catastrophic illness and injuries.
Catastrophic health insurance plans vary, but they generally include the following:
Be aware that these other forms of catastrophic coverage don’t meet the minimum essential coverage required by the Affordable Care Act (ACA or “Obamacare”), so if you have a catastrophic plan, you may still be subject to the tax penalty if you don’t simultaneously have a major medical insurance plan.
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