Catastrophic insurance is a different type of health insurance which does not pay for normal health problems but only for serious medical problems. In other words, a ‘catastrophic’ health insurance pays only for a…’catastrophe, or to be more precise, a medical catastrophe.’ A catastrophic insurance is different as it has a higher deductible, called HDHP (High Deductible Health Plans). It does not include doctor’s prescriptions, costs of medicines and drugs, maternity care bills etc., but it pays for surgeries, hospital bills, tests and X-rays in case of major problems.
Types
There are two main types of catastrophic health insurance: comprehensive health insurance and supplemental health insurance. The comprehensive one is more of the traditional health insurance type. It includes all your medical problems. It is designed in such a way that it covers the emergency medical needs of an individual. After this you do not need to have any other health plan. But comprehensive plans have lower premiums than traditional ones. Supplementary plans are taken in addition to an existing health care plan. You can use it if you already have a plan from the company for which you work, but you are not satisfied with it. Nurse care, psychiatrists, medical transportation etc. may be included in such a plan.
Pros and cons of catastrophic health insurance
The biggest advantage of these insurances is that it is the cheapest of all health insurances. It covers almost all major medical problems. If you end up getting really sick, in addition to the physical pain, you at least will not have the mental anguish regarding your bills. You will have to pay the deductible but it will be only about 10% of the total expense. At least this insurance relives you of the mental tension as it covers all your major medical bills in such a case. Another advantage is that you can afford such a health insurance policy as the premium is very low. This is very beneficial, especially if you have a fixed income. You also get qualified for health saving accounts.
On the other hand, there are certain disadvantages too. The worst of them is the high deductible (the amount that you pay before the policy, as a claim) and a lower premium. These deductibles start from $1000 and may go up to $6000.This may not be very heavy on your pocket, but sometimes it may cause you to postpone essential medical care. Also, your daily medical expenses will increase because you will have to spend on doctor’s fees, prescribed drugs etc. for minor illnesses. For example, HDHPs do not allow even child immunizations and those may end up costing you hundreds of dollars. Moreover, all insurance policies have a maximum value (known as cap value). It refers to the maximum benefits that you can get from the policy. This goes up to $3 million. After this, the policy gets dropped. This is also a very big disadvantage in case of extreme situations, when your medical bills may exceed this value (obviously, most conditions will not exceed 3 million).
Who should get a catastrophic health insurance and how?
The basic idea behind getting it is if you want to save money on health related problems. If you do not suffer from any major health problems, do not take major, regular drugs and do not visit the doctor often, you are ideal for a catastrophic health insurance, especially the young people.
Go online and opt for filling a small form about your health related information and your requirements on the website of an insurance companies. Then you will get relevant details. You can then compare the rates of various companies and choose what best suits your needs. Also remember to ask yourself if you can afford to pay the deductibles, the premium and your doctor’s bills.
