Guide to Catastrophic Health Insurance

Catastrophic health insurance is a type of insurance designed to help you cover the cost of large medical expenses. Here are the basics of catastrophic health insurance and whether or not it is right for you.

Cover Large Expenses

The point behind purchasing catastrophic health insurance is so that you can cover large medical bills. This type of health insurance is not to provide you with a low office visit co-pay. This type of policy is designed to help you avoid bankruptcy if, for example, you have to have a major surgery.

High Deductible

The one thing that you will always find with catastrophic health insurance policies is a high deductible. In order to lower your monthly premiums, you will have to take a high deductible exchange. This means that you will have a deductible that is above $1000. Sometimes, you will see deductibles as high as $5000 or $10,000.

Plan Types

With catastrophic health insurance, you could potentially get a comprehensive plan or a supplemental plan. A comprehensive plan is designed to cover all of the insurance needs of a particular individual. This means that they do not have any other form of health insurance available to them. Sometimes someone purchases catastrophic health insurance as a supplement to her existing health insurance policy. For example, if you have a group health insurance plan through your employer, you may not be satisfied with the coverage that it provides. In order to cover gaps in coverage, you might consider purchasing a catastrophic health insurance policy in addition to what you already have.

Ideal Customers

This type of insurance policy is definitely not for everyone. This insurance requires a special type of customer. If you are the type of individual that rarely goes to the doctor for anything, this might be a plan that you could utilize. If you are self-employed and you do not have access to a group plan, this type of insurance plan might be the only thing that is affordable to you. If you have limited resources, you can get a catastrophic health insurance plan to protect you from going deep into debt if you had some type of medical emergency. For example, if you did not have health insurance of any kind and needed a heart surgery, you would have to come up with well over $100,000. By getting a catastrophic health insurance policy, you would have to come up with only your deductible. Even if you had a $10,000 deductible, this figure would be much more manageable for you.

Health Savings Account

The health savings account is a type of account that is available for those that have high deductible health plans. With a health savings account, you can make tax-free contributions. You will be able to earn a certain amount of interest on your contributions as well. Then you will be able to use the money in the account to pay for health-related expenses. Therefore, if you can get enough money in your health savings account to cover your deductible, you will be in good shape financially.