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In December, the Obama administration announced it would relax the rules on catastrophic coverage. Americans whose health insurance plans or polices were canceled by their insurance carriers are now eligible for a hardship exemption that allows them to buy catastrophic coverage. Previously, the Affordable Care Act only allowed individuals under 30 suffering a financial hardship to qualify for such coverage.
If you qualify for catastrophic coverage, you will not face a payment known as the individual shared responsibility payment, even though in other circumstances catastrophic plans are not considered minimum essential coverage.
What is catastrophic coverage?
Catastrophic plans are designed to protect against high out-of-pocket costs associated with expensive medical bills incurred due to an accident or unexpected illness. These plans typically have lower monthly premiums and higher deductibles than traditional comprehensive major medical insurance plans.
With a catastrophic plan, the deductible must be satisfied before most benefits are paid by the insurance carrier. Under the Affordable Care Act, catastrophic plans include three primary care visits per year and preventive care services as outlined by the federal government. These benefits are available without cost sharing, meaning the deductible requirement does not apply.
How do you apply for catastrophic coverage?
If you wish to enroll in a catastrophic plan, you must fill out an application to obtain a hardship exemption. The form may be found here. Additional information about the types of Obamacare exemptions and associated paperwork may be found at healthcare.gov/exemptions. When applying for catastrophic coverage, you must submit to the insurance company this form along with proof that your health insurance coverage has been canceled.
Do catastrophic plans qualify for subsidies?
No. These plans are not eligible for premium tax credits and other cost-sharing subsidies.
If you qualify for a hardship exemption, you may obtain a penalty waiver by filling out the form mentioned above. This exemption allows you a choice to obtain catastrophic coverage, go without coverage, or enroll in other plans that are not comprehensive but offer accident and illness benefits. These alternative accident and illness plans may offer lower monthly premiums.
The links following provide information on types of alternative plans, including hospital indemnity and short-term medical expense insurance.
For more information about hospital indemnity and short-term medical expense insurance coverage and available plans, visit healthedeals.com or contact a certified health insurance advisor at 888-839-7679.
Jenifer Dorsey is a freelance writer whose specialties include health and fitness, wellness, sports and recreation. She is a competitive amateur track cyclist who also enjoys mountain biking, hiking, camping and other outdoor adventure. Jenifer received a B.A. in journalism from Columbia College Chicago and is an MFA candidate at Naropa University. She lives in Colorado.