September 5, 2025
Newsweek recently published an article featuring Keith Ericson, Professor of Markets, Public Policy, and Law, discussing the upcoming expansion of catastrophic health coverage starting November 1.
The policy will expand eligibility beyond people under 30 to also include Americans losing Affordable Care Act subsidies or facing hardships such as eviction, unaffordable coverage, or medical debt. While intended to lower premiums and protect against major medical costs, the plans carry steep deductibles and could disrupt insurance markets.
“This policy might contribute to the destabilization of the health insurance exchange market. Risk adjustment is an important stabilizer for the insurance market. Catastrophic health plans, however, don’t contribute to the standard risk adjustment pool. As a result, if healthier people move into catastrophic plans, leaving the sicker people behind, premiums could rise in the rest of the market. In this case, the policy would harm affordability for the metal tier plans purchased by the typical individual,” Ericson adds.
The expansion highlights the trade-off between affordability and access, raising questions about whether catastrophic coverage will ease financial strain – or create new challenges in the health insurance market.
