Which statement best describes the cost structure of a Catastrophic health plan?

• A. Very high deductibles and very high premiums.
• B. Very low premiums and very high deductibles.
• C. Low deductible with no out-of-pocket maximum.
• D. No deductible and no out-of-pocket costs.

Answer: (B)

Catastrophic plans are designed to protect you from very large medical bills while keeping monthly costs low. The defining setup is a very low premium paired with a very high deductible, so you pay most of your costs out of pocket until you reach that large deductible, after which coverage for essential benefits kicks in. This structure makes the plan affordable month to month for people who expect to need little care but still want a safety net for worst-case scenarios. The other options don’t fit because they imply either high ongoing costs with little protection, or no deductible and no out-of-pocket costs, which isn’t how catastrophic plans are built.