Expanding Access to Health Insurance: Catastrophic Coverage Available in 2026
Russell Sawayn
Published Sep 23, 2025
As families continue to face rising costs from inflation, higher tariffs, and increasing utility bills, the cost of health insurance is also climbing.
The Centers for Medicare & Medicaid Services (CMS) has announced a new policy aimed at easing the financial burden.
Beginning with the 2026 plan year, more consumers will gain access to catastrophic health insurance plans through the Federally-facilitated Exchange (FFE) and some state-based exchanges.
Not sure what financial aid is available to you? Get the details here.
The Centers for Medicare & Medicaid Services (CMS) has announced a new policy aimed at easing the financial burden.
Beginning with the 2026 plan year, more consumers will gain access to catastrophic health insurance plans through the Federally-facilitated Exchange (FFE) and some state-based exchanges.
Not sure what financial aid is available to you? Get the details here.
Why This Matters
Premiums in the individual insurance market are projected to see one of the steepest increases in recent years by 2026.
For many households, this means standard Qualified Health Plans (QHPs) may become unaffordable, especially for those who don’t qualify for Advance Payments of the Premium Tax Credit (APTC) or Cost-Sharing Reductions (CSRs).
For many households, this means standard Qualified Health Plans (QHPs) may become unaffordable, especially for those who don’t qualify for Advance Payments of the Premium Tax Credit (APTC) or Cost-Sharing Reductions (CSRs).
To address this, CMS is expanding hardship exemption guidance, allowing more consumers to enroll in catastrophic plans if their income makes them ineligible for subsidies.
This ensures that financial pressures from inflation and other market factors don’t leave families without coverage.
What Catastrophic Plans Offer
Catastrophic health insurance isn’t bare-bones, it comes with essential protections:
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Lower Premiums – Designed for affordability in times of economic strain.
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Comprehensive Coverage – Includes all essential health benefits under the Affordable Care Act.
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Financial Protection – Shields households from overwhelming bills in the event of serious illness or injury.
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Preventive Care – Access to preventive services without cost-sharing, encouraging proactive health management.
For many, these plans strike the balance between affordability and security, especially when everyday costs, from groceries to energy, continue to rise.
Who Will Qualify in 2026
Starting in 2026, individuals in the following situations may qualify for a hardship exemption to purchase catastrophic coverage:
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Consumers with incomes too high for APTC (above 400% of the federal poverty level).
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Consumers with incomes too low for APTC (below 100% of the federal poverty level).
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Individuals above 250% of the FPL who are ineligible for CSRs.
This policy applies in FFE states and participating State-based Exchanges, with availability both on and off the Exchange.
How to Apply (Starting November 1, 2025)
Option 1: Online Application
Apply through HealthCare.gov or a certified direct enrollment partner.
The system will automatically check your eligibility for hardship exemptions.
Apply through HealthCare.gov or a certified direct enrollment partner.
The system will automatically check your eligibility for hardship exemptions.
Option 2: Paper Application
Use the hardship exemption form and select Hardship 14 (“You experienced another hardship”). Provide a brief explanation of why rising costs make standard coverage unaffordable.
Use the hardship exemption form and select Hardship 14 (“You experienced another hardship”). Provide a brief explanation of why rising costs make standard coverage unaffordable.
CMS has also committed to an expedited review process, ensuring applications are reviewed flexibly to account for real-world financial challenges.
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