With the rising costs of medical care and skyrocketing health insurance premiums, some are turning to limited insurance plans that only cover unforseen medical costs. The Congressional Budget Office (CBO) defines catastrophic as "a sudden and unpredictable misfortune." In addition, the misfortune often has "grave consequences." If you're in generally good health and rarely visit the doctor, this type of health insurance might be right for you.
Function
The function of a catastrophic health insurance plan is to pay only the expenses associated with what the insurance agency considers a catastrophe. You will still pay for all your day-to-day health costs, but if you suffer a severe injury or debilitating illness, the plan will pay all or a portion of your medical costs, minus the amount of your deductible.
Features
Most catastrophic health plans feature high deductibles. Although individual policies may differ, many catastrophic plans will pay for surgery, x-rays and lab tests and hospitalization related to the incident. They do not pay routine medical care, maternity and delivery or mental health benefits.
Benefits
For those who want insurance against large, unexpected medical costs but can't afford a conventional policy, a catastrophic plan might give them peace of mind. More affordable than other health insurance plans, self-employed individuals may find that this type of policy suits their needs. People over 50 years old, who don't qualify for Medicare, may also choose a catastrophic health insurance plan to cover emergencies.
Options
The choice of deductible amount and payout caps are two of the options individuals have when selecting a catastrophic plan. If you choose a lower deductible, your monthly premiums will be higher. In addition, selecting a plan with higher lifetime payout caps will cost more.
Considerations
If you become ill or suffer an injury, you will have to pay a large deductible. A typical deductible for catastrophic health insurance plan may be thousands of dollars. Some plans have lifetime payment caps that restrict the amount of money the insurance company will pay. Caps are usually high, around $1 million or more; however, once your bills reach the cap, the insurance agency will not pay any more.
Member Comments