Catastrophic Health Insurance: Do You Need to Add a Catastrophic Insurance Policy?
May 17, 2007
If your employer doesn’t offer health insurance, or if you just don’t want to pay for coverage you don’t need, you might want to look into buying a catastrophic health insurance plan. Catastrophic health insurance usually features high deductibles and low monthly premiums. With this type of insurance, you typically pay out-of-pocket for doctors’ visits and prescriptions, but major expenses are covered, such as hospital stays, surgery, intensive care, diagnostic services, x-rays and lab tests. Pregnancy and maternity care usually are not covered.
Catastrophic health insurance is also referred to as “major medical” or “high deductible” insurance. Deductibles for these plans start at $500.00. Caps, or lifetime maximum benefit payments range between $1 and $3 million. The health insurance company stops paying for your medical expenses once you reach the cap. You are required to pay for all medical expenses until you reach the deductible.
You can purchase catastrophic health insurance as an individual plan or through you’re employer’s group plan. Certain pre-existing conditions will make you ineligible for the plan, such as AIDS, diabetes, emphysema, heart disease, multiple sclerosis, and schizophrenia.
People who purchase catastrophic health insurance usually are healthy and either in their 20’s, or between 50 and 65. Young adults who are self-employed or who are not covered by their employer typically buy this type of insurance. Older adults who are concerned with the medical expenses incurred from a heart attack, cancer or other major illness will purchase a high deductible health insurance plan.
Most everyone who uses a high deductible plan is generally healthy, not requiring prescription drugs, and rarely sees the doctor. If you don’t fall into any of these categories, catastrophic health insurance is probably not for you. If you have a serious illness, are on expensive prescription medications, or if you go to the doctor often, you’ll want to purchase a different type of plan. Before buying a high deductible health insurance plan, consider the following:
The cost of the premium.
The cost of the deductible and what you can afford to pay out-of -pocket.
What kind of coverage you want.
Whether you take prescription medications.
Whether you can afford to pay for doctor visits.
If you have pre-existing conditions.
If you get sick often.
The lifetime annual benefit.
If you decide that catastrophic health insurance is for you, there are many options available. You can find an affordable policy by getting a quote online.
