Suppose you're a person who rarely visits the doctor and can pay for routine medical bills, such as an ear infection or blood pressure check. You purchase a Catastrophic plan that has a deductible and 20% coinsurance amount. This means that after your deductible is met, you pay 20% of covered medical bills and the insurance company for your plan pays 80%.
Unfortunately, you have an accident that requires surgery, an extended hospital stay and rehabilitation. These services can cost thousands of dollars and are likely much more than your deductible. In this scenario, you would just pay your deductible and then 20% of the covered expenses until you reach your coinsurance out-of-pocket maximum.
It's a "just in case" type of coverage, so be sure to check the details of any catastrophic plan before you apply.