State RegulationsNY specificDifficulty 1/5
Under the Affordable Care Act, what is the chief purpose of a catastrophic health plan?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under the Affordable Care Act, a catastrophic plan is a safety-net product: premiums are low, but the deductible is very high, so the plan mainly protects the enrollee against ruinous expenses from a serious accident or illness rather than routine care. It still covers essential health benefits once the deductible is met. It is a niche option, not a default choice and not a substitute for Medicare supplement coverage.
Why the other options are wrong
- B) Routine first-dollar coverage is the opposite of a catastrophic design, which shifts everyday costs to a high deductible.
- C) Catastrophic plans are limited-eligibility products, not the default choice for exchange shoppers.
- D) Medicare supplement coverage is a separate market for people with Medicare; catastrophic plans do not replace it.
Memory hook
Catastrophic coverage: low premium, high deductible, worst-case protection.