Facts to Consider When Purchasing Catastrophic Health Insurance
Catastrophic health insurance plans, as with most other health insurance plans, should be researched thoroughly before choosing the plan that is right for you. Especially when considering purchasing your policy online, due diligence is necessary. Here are the vital facts to consider before deciding on a catastrophic health insurance plan.
Is Catastrophic Health Insurance the Best Option for You?
Catastrophic health insurance will not fit with every individual’s lifestyle. If you are in between coverage plans, young, healthy, free from any pre-existing medical conditions, and generally don’t visit the doctor on a regular basis, catastrophic health insurance may be right for you.
With high deductibles and low premiums, catastrophic health insurance plans are designed to be used as riders to other plans or as a type of medical safety net to give you, the policy holder, peace of mind in the event of an emergency. Although the deductibles are usually high, this type of insurance is intended to safeguard the policy holder from completely draining their finances if an emergency surgery, auto accident, job related accident, or other unforeseen mishap should occur.
Here are some additional questions to ask yourself before purchasing a catastrophic health insurance policy:
- Decide if the deductible is actually something you can afford to work with in the event that an emergency should occur. It’s not going to do you any good to purchase a policy with extremely low monthly payments, but with a deductible that is far beyond your financial reach. Keep in mind that most visits to the emergency room, unless critical, are going to cost between $5,000 and $10,000. If the catastrophic policy you are considering has an annual deductible of $5,000, you may be better off to keep searching for another policy that is better suited to your financial needs.
- Are you married? Check the catastrophic health insurance policy you are considering to find out if it has a “per person” deductible or a “family” deductible. You’ll make out much better financially if the plan you are considering has low monthly premiums and a “family” deductible.
- What is your lifetime maximum benefit? Some catastrophic health insurance plans have a lifetime maximum of $1,000,000 per person. This figure is low when compared across the board to other catastrophic plans. Look for insurance companies that provide up to a $25,000,000 per person lifetime maximum benefit.
- What’s the coverage percentage after you’ve reached your annual deductible? Some catastrophic health insurance plans provide 100% coverage once the deductible is reached. Those are the plans to look at. In that situation, the policy basically converts over to a full coverage plan, paying for 100% of all doctor visits, prescriptions, specialists, x-rays, hospital stays, etc.
- Tax deferred savings. Many catastrophic health insurance plans allow the policy holder to open a special savings account which is intended to put the money aside for the annual deductible. This money is able to be used to pay medical expenses, pre-tax. This can be a huge advantage which can allow $5,000 or more annually to be used for medical costs tax free.
- Make sure the insurance company is legitimate. Once you’ve found the perfect catastrophic insurance plan for you, be sure to check with the Better Business Bureau to make sure of the financial soundness of the company. This is the last step in your due diligence.
Catastrophic health insurance plans aren’t right for everyone, but if you meet the criteria, this coverage can be ideal for you.