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Catastrophic Health Insurance Plans

Catastrophic health insurance is a type of insurance that covers only major expenses. Often times this insurance has a multi-thousand dollar deductible that must be met before any payment is made from the insurance company. This insurance is better than no insurance, but you must be prepared to pay entirely out of pocket for doctor visits, prescriptions, routine checkups, etc. Sometimes if the catastrophic health plan is categorized as a qualified high deductible health plan by the IRS then this type of insurance is paired with a Health Savings Account (HSA).

Catastrophic insurance plans generally provide health insurance coverage for hospital stays, surgery, intensive care, diagnostic X-rays and laboratory tests. On the average, people who buy catastrophic health plans are either in their 20's, or between the ages of 50 to 65. Young adults tend to buy the coverage if they are self-employed or don't get coverage through work. On the other end of the spectrum, older adults purchase a catastrophic health insurance plan when they are concerned with financial losses in the event of a heart attack, cancer or other serious illness. They tend to be healthier, on few or no prescription medicines, and are more concerned with saving on their premiums, and would rather pay out-of-pocket for doctor's visits.

Catastrophic health schemes do not pay for routine doctor visits or health treatments. Individuals opting for catastrophic health insurance plans are normally healthy and prefer to pay out of their pocket for all small health medications in order to save on monthly premium amounts. In addition, catastrophic health insurance coverage does not provide for preexisting medical conditions like AIDS, diabetes, emphysema, heart disease, multiple sclerosis, schizophrenia etc. and such affected individuals will not be eligible for catastrophic health plans. Catastrophic heath insurance plans charge low monthly premiums and provide maximum benefit payments to the insured. The benefits obtained may be as high as $1 million to $3 million. High deductibles are typical for such insurance plans, they may range between $2000 and $10,000, and the levels of coverage will vary depending on the type of high-deductible plan that is selected.

Tips For Selecting Catastrophic Health Insurance

Here are some tips to select the right health insurance plan for catastrophic health conditions: • Select plans that require you to pay low monthly / quarterly / annual premium amounts. • Check on the level of deductible before selecting the plan. • Decide on the extent and kind of health insurance coverage that you require. • Decide if it is affordable to pay for individual medical visits. If you get sick often then catastrophic health insurance plans may not be a wise choice. • Check out the lifetime annual benefit that the particular catastrophic plan offers. Ask yourself these questions: • Do you require prescription medications? • Do you have any pre-existing conditions? • Do you get sick often (and need prescriptions and trips to the Doctor's office frequently)? • Does the plan cover any pregnancy expenses or offer any type of maternity benefit? • What is the lifetime maximum annual benefit? • Have you compared an HSA and it’s tax benefits?

Many times a catastrophic health insurance policy is taken to cover the treatment in intensive care units and also the unexpected problems in pregnancy. The catastrophic insurance plans offer maximum health insurance coverage in such cases. In some states, the employer who does not offer any other health insurance may offer catastrophic health insurance to employees. Alternatively, catastrophic insurance is also used by young people whose employers do not offer them the benefits of health insurance. When obtaining catastrophic health insurance coverage, the person being insured should ensure that he does not get trapped by a deductible larger than he can afford. It is essential to check with the insurance company for the specifics of the coverage before signing up for it.

Benefits of Catastrophic Health Insurance

Before deciding on a particular catastrophic health insurance plan, it is necessary to ensure that it provides the right kind of insurance coverage. An ideal health insurance plan is one that provides coverage for the following expenses: • Hospital expenses -Includes room expenses, board and incidental service. • Surgical expenses - May cover surgeons' fees and other surgery related expenses. • Physicians' expenses - Covers doctor fees or fee for visit to any doctor's office or hospital. • Major medical expenses - Offers wide insurance coverage for protection against disastrous illness or injury.

Costs of Catastrophic Health Insurance

Catastrophic health insurance plans typically have deductibles starting at $1,500/$2,000 and going up. Many have high lifetime maximum benefit payments, also referred to as "caps," between $1 million and $3 million. Once the cap is reached, your insurance company will not pay for any medical expenses and your health insurance policy will become void (one important thing to watch out for is to steer clear of insurance policies that have caps and limits in the policy in addition to this lifetime maximum lifetime benefit limit. It is common to have limitations on treating things like mental health but if there are general limitations on common surgery and the like then think twice about purchasing the policy. Watch out for per procedure limits, calendar year limits, and any plan that is structured as an indemnity insurance plan).

Also, it should be noted that most catastrophic health insurance plans do not cover pregnancy, and if they do cover maternity then it is common, as is the case with almost all individual health insurance plan, to have some type of waiting period for a full year after your effective date where either no maternity benefits or limited maternity benefits will be paid out. If maternity health insurance is a necessity to you then be sure and find out if you are able to add on a maternity rider to the catastrophic plan that you are considering purchasing and that the coverage will fit your pregnancy timeline.

Under a high-deductible plan, you are expected to pay your medical needs until the expenses reach the cost of your deductible. If you increase your deductible to reduce your monthly premiums, you are taking a gamble on how much money you'll have to spend on self-health care. For example, if your deductible is $15,000 and you have surgery that costs under that amount, you are required to pay for the entire surgery out-of-pocket. Keep in mind that you will still enjoy the lower negotiated rates that the insurance company has negotiated for you if you choose a Doctor that is considered in-network for your plan so you will still save quite a bit of money (especially if you choose a large and well known company with a big network like a United Healthcare, Aetna, etc.) versus someone that doesn’t have any health insurance at all.

Compare Catastrophic Health Plans vs. Comprehensive Health Plans Now!

Catastrophic health insurance can help you cover major medical expenses, but there is usually a high deductible with the plan. To be a wise buyer you need to check to see what type of plan you can afford and what plan will best meet your needs. As with any insurance plan, be sure to shop around and compare quotes from multiple insurance companies when purchasing catastrophic insurance. Use our free health quote finder to compare rates from the top insurance companies that offer coverage in your home zip code. Get your free health insurance quote comparison now!