What is a fundamental characteristic of catastrophic health insurance?

Catastrophic health insurance is designed primarily to provide a safety net for major health expenses rather than covering everyday medical costs. This insurance type typically features lower premiums, making it more accessible for those who are generally healthy and do not anticipate frequent medical care. The key characteristic is its emphasis on serious health events, which are usually unexpected and can lead to significant financial burden.

With high deductibles, catastrophic plans require individuals to pay a substantial amount out-of-pocket before the insurance begins to cover costs. This structure encourages the insured to manage their healthcare expenses carefully, utilizing the insurance primarily for substantial and unforeseen medical events, such as severe accidents or major illnesses. In essence, it serves as a financial buffer against high medical bills, aligning with the concept of "catastrophic" coverage.

Options that suggest high premiums and low deductibles, coverage of routine doctor's visits, or unlimited coverage for all health needs mischaracterize the primary focus of catastrophic health insurance, which is on managing risk for significant health expenses rather than everyday healthcare transactions.