What is "catastrophic coverage" in health insurance designed to protect against?

Catastrophic coverage in health insurance is specifically designed to protect individuals from very high costs that can arise due to severe health events or emergencies. This type of coverage typically has a high deductible and is aimed at providing financial relief in extreme situations such as serious accidents, major surgeries, or life-threatening illnesses where the medical expenses could be overwhelmingly high.

It's important to distinguish this from other options. Minor injuries and routine healthcare costs are usually covered under basic health plans that provide more comprehensive coverage. Similarly, preventive healthcare and outpatient care typically involve more routine health issues and are often covered without the high deductibles associated with catastrophic plans. Regular hospitalization costs also fall under more standard health insurance coverage rather than catastrophic plans, which are specifically focused on preventing financial ruin from extraordinary medical expenses. Hence, the design and purpose of catastrophic coverage is fundamentally to offer a safety net against these significant and often unpredictable health-related financial burdens.