How is “catastrophic health insurance” best defined?

Catastrophic health insurance is best defined as a low-premium, high-deductible policy designed to cover severe health conditions. This type of insurance aims to protect individuals from extremely high medical costs by providing a safety net in the event of serious health issues, such as major accidents or illnesses.

The structure of catastrophic health insurance typically includes lower monthly premiums, making it an attractive option for younger individuals or those who are generally healthy and do not expect to incur significant medical expenses. However, these plans usually require policyholders to pay a higher deductible before coverage kicks in for essential health benefits, ensuring that they are financially responsible for day-to-day health care costs until a significant health event occurs.

By providing coverage primarily for severe medical situations, this kind of insurance helps to shield individuals from the financial devastation that can result from unexpected, high-cost health events, while still encouraging them to engage in preventive care and stay healthy.