What type of insurance policy is typically designed to cover catastrophic medical events?

High-deductible health plans (HDHPs) are designed to provide coverage for catastrophic medical events while generally keeping premiums lower than traditional health insurance plans. These plans often have higher deductibles, meaning the insured pays a larger portion of their medical costs out-of-pocket before insurance kicks in. This sets them apart as they are structured to protect against large, unexpected health expenses, making them suitable for individuals who want to safeguard themselves against catastrophic health issues without committing to a higher monthly premium.

The focus of HDHPs on catastrophic coverage is particularly beneficial for young, healthy individuals who may not require frequent medical services but want to ensure financial protection in the event of a serious illness or injury. In contrast, standard health insurance, comprehensive health insurance, and managed care plans typically provide more extensive, day-to-day healthcare services, whereas the primary intent of high-deductible health plans is to manage major healthcare costs.