Can I use a premium tax credit or other savings with a catastrophic plan?

Short answer: No. By law, a catastrophic plan is not treated as a qualified health plan for the premium tax credit, so you cannot use advance subsidies or cost-sharing reductions to lower its cost. If you qualify for that financial help, a Bronze or Silver plan is usually a better value because the savings apply to it.

Catastrophic plans already have very low premiums, but they sit outside the subsidy system. The federal tax law that creates the premium tax credit provides that the term qualified health plan shall not include a qualified health plan which is a catastrophic plan, so no premium tax credit can be applied to one.

That is why HealthCare.gov advises that if you qualify for the premium tax credit or cost-sharing reductions, a Bronze or Silver plan may be a better value. With a subsidy, a Silver plan can end up costing less than an unsubsidized catastrophic plan while covering more. Always ask the Marketplace to check you for savings and compare before choosing catastrophic coverage.

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