How does catastrophic health insurance differ from traditional health insurance?

Catastrophic health insurance is specifically designed to protect individuals from very high costs associated with severe medical events. Unlike traditional health insurance, which may provide a broader range of services with lower out-of-pocket costs, catastrophic plans typically entail high deductibles that must be met before the insurance coverage kicks in. However, they do cover essential health benefits after the deductible is satisfied, primarily focusing on scenarios such as serious accidents or illnesses.

This approach makes catastrophic insurance less expensive in terms of premiums but requires policyholders to manage higher upfront costs when facing healthcare needs. It is particularly attractive to younger, healthier individuals who may not require regular medical care but want a safety net for unexpected, high-cost health emergencies.

The other options misrepresent the characteristics of catastrophic health insurance. For instance, the concept that it covers all medical expenses without deductibles does not apply, as high deductibles are a defining feature. Additionally, it is not limited to preventive care services, as those are typically included in standard plans and do not reflect the primary goal of catastrophic coverage. Furthermore, while catastrophic plans may have certain eligibility criteria, they are not universally available without regard to health status; they are often structured to cater to specific demographics or qualifying circumstances.