Photo: Courtesy HealthCare.gov
The Department of Health and Human Services is offering catastrophic health insurance through a new hardship exemption in the Affordable Care Act market.
The affordable coverage is for consumers who are ineligible for advance payments of the premium tax credit (APTC) or cost-sharing reductions (CSRs).
Catastrophic health coverage for those who qualify begins at the start of open enrollment on Nov. 1.
Catastrophic plans offer lower monthly premiums to protect consumers from high medical costs in the event of serious illness or injury. The plans are required to cover three primary care visits pre-deductible.
Consumers under the age of 30 have always been eligible for catastrophic plans through HealthCare.gov, HHS said.
WHY THIS MATTERS
Open enrollment in the ACA marketplace starts on Nov. 1, ahead of the expiration of premium tax credits at the end of this year.
The tax credits were implemented under the Biden administration as part of the American Rescue Plan in 2021 and were extended through the Inflation Reduction Act.
Recently, 10 House Republicans released legislation to extend enhanced tax credits, according to Politico.
Without another extension, out-of-pocket premiums for ACA marketplace enrollees are expected to increase by an average of more than 75%, according to the Peterson-KFF Health System Tracker. This is expected to cause healthier enrollees to drop coverage, leading to further premium increases.
Health insurance premiums are projected to rise substantially for the 2026 plan year across the individual market, HHS said.
Reasons include the growth in healthcare prices, higher costs associated with the utilization of high-priced drugs and market factors such as labor costs and inflation, the KFF report said.
Consumers who have a hardship in obtaining coverage may qualify for an exemption to purchase a catastrophic plan. Hardship exemptions are for those who are ineligible for an advanced premium tax credit or cost-sharing reduction based on their projected annual household income.
Catastrophic plans provide all essential health benefits required under the Affordable Care Act, including access to preventive services without cost-sharing. They offer comprehensive coverage designed to protect consumers against medical expenses from serious illness or injury.
THE LARGER TREND
ACA premiums are expected to increase by an estimated 18% across the 312 insurers participating in the ACA marketplaces for 2026, according to the Peterson-KFF Health System Tracker. This is about 11 percentage points higher than last year and represents the largest rate change insurers have requested since 2018, the last time policy uncertainty contributed to premium increases, the report said.
ACA open enrollment starts on Nov. 1. Dec. 15 is the last day to enroll in or change plans for coverage starting Jan. 1.
Open enrollment ends on Jan. 15, and coverage for those signing up after Dec. 15 starts on Feb. 1.
ON THE RECORD
“Catastrophic coverage offers affordable health insurance for younger Americans and those facing hardship to have security when they need it most,” said HHS Secretary Robert F. Kennedy Jr. “Expanding access to catastrophic coverage is another step in making health insurance more affordable, building on the progress made since the passage of President Trump’s One Big Beautiful Bill.”
Email the writer: SMorse@himss.org