Which of the following best describes a catastrophic health plan?

A catastrophic health plan is designed primarily to protect individuals from significant financial losses due to severe health issues or emergencies. It typically features higher deductibles, meaning that the insured is responsible for a substantial amount of their medical expenses before insurance coverage kicks in. This type of plan is characterized by its low monthly premiums, making it more affordable in terms of regular payments, yet it is intended to cover only the most critical situations, such as hospitalization or emergencies, rather than routine health care needs.

The focus on worst-case scenarios means that these plans are not ideal for individuals who require frequent medical care or have ongoing health conditions, as regular healthcare services typically are not covered until the high deductible is met. Therefore, the designation of a catastrophic health plan best aligns with its purpose of addressing extreme medical expenses while keeping monthly costs lower for those who are generally healthy and do not anticipate needing frequent medical care.