Exclusive: HHS to expand eligibility for catastrophic plans

Axios – Thursday, September 4, 2025
By Tina Reed

The Trump administration is expanding individuals’ ability to purchase catastrophic health insurance during Affordable Care Act enrollment if they qualify for a hardship exemption based on their household income, officials tell Axios first.

Why it matters: The coverage could be a less costly alternative to protect individuals against high medical costs in the event of serious illness or injury.

• But it could expose customers to possibly high out-of-pocket costs until they reach a deductible.

Driving the news: The new guidance from the Health and Human Services Department will kick in at the start of ACA enrollment on Nov. 1 and streamline access for individuals who are ineligible for ACA subsidies or cost-sharing reductions.

• Eligibility would be based on projected annual household income.
• The plans comply with ACA coverage requirements for essential health benefits, including preventive services without cost-sharing, while offering lower premiums, HHS said.
• Officials didn’t provide more details.

What they are saying: “This change reflects our commitment to lowering costs, strengthening program integrity and ensuring every American has a pathway to coverage that fits their needs without burdening taxpayers,” CMS Administrator Mehmet Oz said in a statement.

The big picture: Consumers under 30 have always had access catastrophic plans on Healthcare.gov.

• The expanded option comes as enhanced ACA subsidies are due to expire at the end of this year unless Congress acts to extend them.
• Health care providers and patient advocates have been pressuring Congress for a short-term extension, to avoid potentially steep premium increases this fall.
• Most Republicans object to extending the aid, characterizing the payments as handouts to health insurers.

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