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A little-known option for Americans in search of health insurance on the newly launched insurance exchanges has been gaining publicity lately, perhaps despite the administration’s best efforts to keep it under wraps: and that is the ‘catastrophic’ health plan option.
Originally meant to be coverage for the under-30 crowd, it could actually be a viable stop-gap option for some of those people whose affordable plans are being terminated. The problem right now seems to be, however, finding the plan and signing up for it.
“Presumably, people would be able to get that as soon as the [enrollment system] is working,” said Tim Jost, a professor at Washington and Lee University and expert on the Affordable Care Act. “That’s probably why they’re not pushing it real hard right now.”
This plan can also help people whose health insurance bill suddenly exploded. Not only can those under 30 get the catastrophic plan, but also older people who are exempt from the individual mandate due to their limited incomes. The problem is the Department of Health and Human Services has not finished building the system for applying for and certifying those exemptions. It could take several more weeks until they are.
Subsidies cannot be used to reduce the cost of the catastrophic option, but those eligible for subsidies can choose the so-called ‘bronze plan,’ the cheapest plan eligible for subsidies.
“The difference between catastrophic and bronze is very minimal,” said Yevgeniy Feyman, a fellow at the Manhattan Institute. “You might be paying $5 or $10 less for the catastrophic plan than the bronze. … The bronze plans are, in some way, becoming the new catastrophic plans.”
The catastrophic plan has been almost invisible in the public discussion of the Affordable Care Act. During the recent congressional testimony of the HHS Secretary Kathleen Sebelius and the head of Centers for Medicare & Medicaid Services Marilyn Tenner mentioned the catastrophic plan only as an option for young people. The reality is however it is an option for others as well.
