Catastrophic Health Insurance: 2026 Rule Changes

Starting November 1, 2025, the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) will expand access to catastrophic health insurance. Under new guidance for the 2026 plan year, more people can qualify for these lower-premium plans if their income or hardship situation makes other coverage unaffordable.

Previously, only those under 30 or with specific hardship or affordability exemptions were eligible.

Key 2026 Updates

• Income-Based Hardship Exemptions: If your projected household income is below 100% or above 400% of the federal poverty level (FPL), you will now qualify for a hardship exemption and can enroll in catastrophic coverage. CMS also plans to expand eligibility to those above 250% FPL who don’t qualify for cost-sharing reductions (CSRs).

• Application Improvements: Consumers can apply directly through HealthCare.gov, which will now automatically evaluate hardship eligibility. Alternatively, a hardship exemption form can still be submitted by mail.

• Age Rules Remain, But Loosened:

  • People under 30 still automatically qualify.

  • Adults 30 and older can now qualify more easily if they are ineligible for subsidies (APTC or CSRs) due to income, expanding hardship exemptions without removing the age cap entirely.

• Expanded Hardship Definition: Rising premiums and affordability issues themselves can now count as a qualifying hardship, not just extraordinary personal circumstances like bankruptcy or homelessness.

These changes apply to consumers in Federally-facilitated Exchange (FFE) states, participating State-based Exchanges (SBEs), and even off-exchange markets.

What Is Catastrophic Health Insurance?

Catastrophic health insurance is a type of plan available through the Affordable Care Act (ACA) marketplace. It’s designed to protect against very high medical costs.

Key features include:

• Lower monthly premiums than most ACA plans

• High deductibles (you pay out of pocket until the deductible is met)

• Coverage for all ACA-required essential health benefits

• Three primary care visits per year before the deductible applies

• Preventive care at no cost

These plans are mainly meant as a financial safety net for serious illness or injury.

Who Qualifies?

You may qualify for a catastrophic plan if you:

• Are under 30, or

• Receive a hardship exemption, or

• Receive an affordability exemption

Hardship Exemptions

• Current: Homelessness, bankruptcy, medical debt, natural disasters, or unaffordable coverage.

• 2026 Update: Income thresholds and market conditions (like premium spikes) now count as hardships. This means more adults 30+ will qualify.

Affordability Exemptions

• If the lowest-cost coverage available is unaffordable compared to household income.

What’s Covered (and What’s Not)

Like all ACA marketplace plans, catastrophic coverage includes the 10 essential health benefits, such as hospitalization, emergency services, prescription drugs, maternity care, and preventive services.

You’ll still pay out of pocket for:

• Additional doctor visits beyond the three included

• Specialist visits

• Tests or procedures not considered preventive care

• Services outside essential benefits (like chiropractic or massage)

How to Enroll

• Under 30: Catastrophic plans appear automatically when shopping on HealthCare.gov.

• 30 or older:

  • Current rule: You need an approved hardship or affordability exemption.

  • 2026 update: If your income excludes you from ACA subsidies (APTC or CSRs), you’ll automatically qualify for hardship and can select catastrophic coverage online.

• Applications can be completed online or by mail.

Alternatives to Consider

Depending on your age and situation, you may also explore:

• Staying on a parent’s plan until age 26

• Student health insurance (if enrolled in school)

• Employer-based coverage

• ACA marketplace plans with bronze, silver, or gold coverage (with subsidies if eligible)

• Health care sharing ministries (not insurance and not legally required to pay claims)

Explore other ACA marketplace alternatives that may fit your health needs.

Frequently Asked Questions (FAQs) About Catastrophic Health Insurance

What is catastrophic health insurance?
A low-premium, high-deductible plan covering essential benefits, preventive care, and three primary care visits per year. Designed to protect against very high medical costs.

Who qualifies for catastrophic health insurance?
Currently, those under 30, or anyone with a hardship or affordability exemption. Beginning November 2025, more people aged 30+ will qualify if their income makes them ineligible for ACA subsidies (below 100% FPL or above 400% FPL, with future expansion above 250% FPL).

What does a catastrophic plan cover?
The 10 essential ACA health benefits, plus preventive services and limited primary care.

How do you apply for catastrophic health insurance?

• Under 30: Directly through HealthCare.gov.

• 30 or older: Apply for a hardship exemption. From 2026, hardship will be automatically assessed if your income makes you ineligible for subsidies.

Bottom Line

Catastrophic health insurance can be an option for people who don’t qualify for ACA subsidies but still want protection from major medical bills. With the new HHS guidance, more individuals will have access beginning in 2025, though it’s important to compare catastrophic plans with subsidized ACA options to see which offers the best overall value.

Check your eligibility using our ACA Subsidy Calculator, regardless of your income, to see your estimated subsidy rate or consider switching plans.