Unfortunately in today’s America, many individuals and families are living without basic health insurance coverage. We are not only speaking of the severely financially disadvantaged, because when finances are low enough, state Medicaid coverage kicks in. The portion of the population most severely affected by today’s changing economy is the working middle class, often stuck in a mediocre paying job that doesn’t offer health insurance coverage. This is becoming the norm today.
So, what is a family to do in order to provide health coverage in the event of an emergency? Today we are going to take a look at the basics of catastrophic health insurance and define exactly what it does and does not offer in the way of coverage.
The Basics of Catastrophic Health Insurance
In absolute simplest terms, the basics of catastrophic health insurance consist of low insurance premiums plus a relatively high deductible. So, why would a person or a family choose a catastrophic health insurance plan? There are several reasons. Here are a few:
- You’re in between jobs and don’t want to shell out the high premiums for Cobra.
- You’re over 18 and your parent’s medical insurance no longer provides coverage for you, but you are in relatively good health and just want coverage in case of emergency.
- You are not quite financially able to provide yourself or your family with full medical coverage, but want to provide a financial safety net should an unfortunate accident occur or an unforeseen illness or emergency surgery become necessary.
If this sounds like a situation you are currently in, catastrophic health insurance may be right for you. Here are a few more things you’ll need to consider before making your final decision:
- Your deductible can be anywhere from $300 to $5,000, so be sure you are aware of what’s on your quote. (The deductible is the annual amount you will be required to reach before the insurance kicks in and pays anything. Sometimes, once the threshold is reached, the catastrophic health insurance will pay 100%. But that’s not always the case. Be sure to do your homework. Some catastrophic health insurance policies that have extremely low premiums will actually only pay a percentage of your medical bills or have certain restrictions, even after you’ve reached the deductible.)
- You will be completely 100% responsible for your medical expenses until your deductible has been reached. If you set your deductible too high (for example, over $2,500) it may be extremely difficult for you to manage your finances if medical expenses arise.
- You agree to cover your own medical costs up to that deductible amount.
Is Catastrophic Health Insurance Worth the Monthly Premiums?
Although this is a personal decision, it is probably in your best interest to carry some type of health insurance coverage on yourself and your loved ones, if you are financially able. Catastrophic health insurance plans can vary widely, so you’ll have to examine every quote thoroughly to be sure the company has your parameters right.
Where Are the Loopholes? What’s Not Covered With a Catastrophic Health Insurance Plan?
This is completely dependent upon the particular catastrophic health insurance plan you choose, but for the most part all plans cover hospital visits and extended stays, procedures such as x-rays, lab tests, and surgery.
So what isn’t covered? Often, routine events, such as visits to the family physician, medications, certain pre-existing conditions, and prenatal care are not included in the coverage (a maternity rider can be added to a catastrophic plan though).
The key to finding a catastrophic health insurance plan that fits your needs is to shop around and be sure to read your quote thoroughly.