Catastrophic Health Insurance: Who Qualifies in 2027 and How It Compares to Bronze

Updated October 2026 for the 2027 plan year

What is catastrophic health insurance?

A catastrophic plan is a category of ACA-compliant plan built mainly to protect you from very large medical bills. It has lower premiums than most Marketplace plans and a deductible equal to the yearly out-of-pocket limit, so you pay for most routine care yourself.

The term means something specific under the Affordable Care Act. It is not a short-term plan, an accident policy or a health sharing ministry. A catastrophic plan carries every ACA protection: no denials or surcharges for pre-existing conditions, all ten essential health benefits and a cap on what you pay each year.

HealthCare.gov describes catastrophic plans as having very high deductibles and notes you can get one only if one is available in your area. Not every insurer sells them in every county.

Who qualifies for catastrophic health insurance in 2027?

For 2027 coverage, you qualify for a catastrophic plan if you are under 30 or you have a hardship or affordability exemption from the Marketplace. People 30 and older need an exemption certificate number (ECN) before they can enroll.

The federal rule is exact about age: you must not have turned 30 before the first day of the plan year (45 CFR 156.155). If you turn 30 during 2027, you can keep a catastrophic plan that started January 1, 2027. If you are 30 on January 1, you need an exemption.

Hardship and affordability exemptions

HealthCare.gov lists the hardship and affordability exemptions that open catastrophic coverage to people 30 and over. Examples include:

• The lowest-priced coverage available to you costs more than a set share of your household income (the affordability exemption).
• You were found ineligible for Medicaid because your state didn’t expand Medicaid.
• Other listed hardships, such as homelessness, eviction, domestic violence, a disaster that damaged your property, or medical debt.

You apply with the form on HealthCare.gov and receive an ECN, which you enter when you pick a plan. Under 30? You don’t need an exemption at all.

What happened to the wider catastrophic hardship exemption?

A federal court has blocked the expansion for now. On July 16, 2026, the U.S. District Court for the District of Maryland stayed the 2027 rule that would have let more adults buy catastrophic plans based on income, along with the related September 2025 guidance.

Here is the short history. On September 4, 2025, the Centers for Medicare & Medicaid Services (CMS) issued guidance supporting a hardship exemption for people ineligible for premium tax credits or cost-sharing reductions because of their income. The 2027 Notice of Benefit and Payment Parameters then wrote a version of that into regulation, for incomes below 100% or above 250% of the federal poverty level (CMS fact sheet).

In City of Columbus v. Kennedy (No. 1:26-cv-02215), the court stayed that provision while the case continues. CMS’s updated statement of August 4, 2026 lists “the expansion of eligibility for catastrophic plans… along with the related guidance issued September 4, 2025” among provisions that “didn’t or won’t go into effect as finalized.” The same order stayed a planned increase in catastrophic and Bronze out-of-pocket limits.

What does catastrophic health insurance cover?

A catastrophic plan covers the same ten essential health benefits as other Marketplace plans, including hospital care, prescriptions, maternity care and mental health care. You simply pay full price for most of it until you hit the deductible.

Two things are covered before the deductible:

• Preventive care at no cost, such as recommended screenings, vaccines and annual checkups. Federal rules bar any cost-sharing for preventive services on these plans.
• At least three primary care visits per year, as HealthCare.gov confirms. You may owe a copay.

After that, the plan provides no benefits until your spending reaches the annual cost-sharing limit. For 2027 the federal out-of-pocket maximum is $12,000 for an individual, so a catastrophic deductible sits at that level. Once you reach it, the plan pays 100% of covered in-network care for the rest of the year. Our deductible vs. out-of-pocket maximum guide explains how those two numbers work.

Can I get a subsidy on catastrophic health insurance?

No. Premium tax credits can’t be used to buy a catastrophic plan, and cost-sharing reductions don’t apply either. That is the biggest reason a catastrophic plan often costs more after subsidies than a Bronze plan.

The rule is written into the Internal Revenue Code: for the premium tax credit, a “qualified health plan” shall not include a qualified health plan which is a catastrophic plan. HealthCare.gov adds that if you qualify for a premium tax credit, a Bronze or Silver plan may be a better value.

For 2027 the stakes are higher. Enhanced credits expired on December 31, 2025, and the 400% “subsidy cliff” is back, but below 400% of poverty the credit still caps what you pay for the benchmark Silver plan at 2.15% to 10.22% of income (IRS Rev. Proc. 2026-26). See our 2027 health insurance subsidies guide.

Can I pair catastrophic health insurance with an HSA?

Yes, starting in 2026. A 2025 federal law, the One Big Beautiful Bill Act, made Bronze and catastrophic plans HSA-compatible, so enrollees can contribute to a health savings account and deduct those contributions.

The IRS explained the change in Notice 2026-5: for months beginning after December 31, 2025, a Bronze or catastrophic plan available as individual coverage through an Exchange is treated as a high-deductible health plan, even if it wouldn’t otherwise meet the HSA deductible and out-of-pocket tests. HealthCare.gov now says all Bronze and Catastrophic health plans work with Health Savings Accounts.

An HSA lets you set aside pre-tax money for the costs you pay before the deductible. Unused money stays in the account from year to year. Annual contribution limits are set by the IRS each year.

Catastrophic health insurance vs. Bronze: which is better?

For most people who qualify for a premium tax credit, Bronze is the better buy, because the credit can only be used on Bronze and other metal plans. Catastrophic can win for someone under 30 with income above 400% of poverty, who gets no credit either way.

Compare the premium you’d actually pay after any credit, then add the deductible risk you can live with. Our Bronze vs. Silver vs. Gold vs. Platinum guide covers the other metal levels.

Who should, and shouldn’t, choose catastrophic health insurance?

Catastrophic coverage fits healthy young adults who mostly want protection from a large, unexpected bill and won’t receive a premium tax credit. It fits poorly for anyone who uses regular care or qualifies for subsidies.

It can fit if you

• Are under 30, rarely see a doctor and take no regular medications.
• Have income above 400% of the federal poverty level, so no credit applies to any plan.
• Want an HSA and can save toward a high deductible.

It usually doesn’t fit if you

• Qualify for a premium tax credit or cost-sharing reductions.
• Are pregnant, planning a pregnancy or managing a chronic condition.
• Couldn’t cover a $12,000 bill if something went wrong.

Low income? Check Medicaid first, and see our affordable health insurance guide and how to choose a health plan.

How Honesty compares catastrophic plans

Honesty®, a licensed AI insurance agent from Honesty® Insurance Services, LLC (NPN 21094885), checks your age and exemption status, prices catastrophic plans against Bronze and Silver after any premium tax credit, and flags HSA-eligible options. It compares ACA, alternative and ancillary plans, works for you rather than the carriers, and never sells or shares your data.

A catastrophic plan isn’t always the lowest-cost choice; compare it with the other routes in our guide to the cheapest health insurance.

If you’re under 30, compare a Catastrophic plan with the other routes in our guide to health insurance for young adults, including a parent’s plan, student plans and Medicaid.

Frequently asked questions

Keep learning: metal levels compared, deductible vs. out-of-pocket maximum, short-term health insurance, Open Enrollment 2027 and how Honesty.AI works.