What does catastrophic insurance cover

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What is catastrophic health insurance?

Catastrophic health insurance plans are one option for individuals or families who do not have coverage through an employer or cannot afford the cost of private health insurance plans. Coverage is generally limited and deductibles are high through a catastrophic health insurance plan, but an individual’s or family’s assets are still protected in the event of an illness or injury.

Catastrophic health insurance plans are also called high-deductible plans, as that is one of the major features of this type of coverage.

Health insurance coverage is a major concern for many Americans as it is necessary to protect the health and assets of an individual or family. Many get health insurance coverage through an employer or private health insurance provider, but some individuals or families do not have such options.

How does catastrophic health insurance work?

Most health insurance plans have a yearly deductible as part of the costs of a plan; a deductible is an out-of-pocket dollar amount that must be paid by the plan participants before the health insurance will begin to pay for medical services. In a catastrophic health insurance plan, the deductible is much higher than in average plans.

This high-deductible plan allows consumers to have coverage in the event of a major illness or accident that has a high cost for treatment. Once the consumer has made out-of-pocket payments for medical services that equal the deductible, then the catastrophic health insurance will begin to pay for medical treatment.

How much are deductibles for catastrophic plans?

Deductibles will vary depending on factors such as the area the applicant lives in, age, gender, and overall health. Generally, the deductibles will be much higher than those associated with private insurance or group insurance will ranging from several hundred dollars into the thousand-dollar range.

What will catastrophic health insurance cover?

Coverage will vary between individual plans. High-deductible health insurance plans are meant to cover medical treatments associated with disease, health conditions and accidents or injury. They generally cover surgery, hospital stays, testing such as blood work and x-rays and other high-dollar procedures that are medically necessary.

What medical services are not covered by catastrophic health insurance?

High-deductible insurance plans generally will not cover routine services such as doctor visits, health screenings, or prescription costs. Those average services must be paid for by the individual. Other services not covered by catastrophic health insurance include standard dental and vision services.

Catastrophic health insurance is not meant to cover routine services and basic health issues. It is meant to protect participants from very expensive medical costs.

What other options work with catastrophic insurance?

Because catastrophic insurance does not cover basic or routine health services, many

individuals choose to pair a high-deductible plan with a health savings account. An individual contributes money to a health savings account, and that money can be used to pay for all of those services not covered by the catastrophic insurance.

The advantage of a health savings account is that the money contributed to the account cannot be taxed by the federal government. This lowers an individual’s taxable income and thus the yearly income taxes owed to the federal government.

What are the benefits of catastrophic health insurance plans?

Because of the high deductibles, catastrophic health insurance plans have a lower cost, or premium, than regular insurance plans. This lower cost allows participants to have some measure of health insurance coverage; the alternative is usually no health insurance at all.

Catastrophic health insurance plans provide peace of mind because an individual or family is protected in the event of a major illness or injury. Treatments for accidents and illnesses can be so costly as to wipe out an individual’s or family’s savings, home ownership, credit rating and financial freedom.

What are the disadvantages?

A catastrophic health insurance plan does not help to pay for basic or routine medical services. While not as expensive as surgery or a visit to an emergency room, the cost of basic services can still be a financial burden on an individual or family. Unfortunately, many choose to forgo basic services such as check-ups and health screenings in an effort to save money.

Furthermore, those basic services have been shown to be the leading method to educate people about healthy habits and to lower disease rates through prevention. People cannot learn as easily about the benefits of a heart-healthy diet or that they have all of the health indicators that lead to diabetes without routine visits to a doctor or other health care professional.

Are there limits on how much a catastrophic health insurance plan will pay?

Health insurance providers used to be able to set a lifetime limit on how much the company would pay on a particular plan. A maximum lifetime payout might have been $1 million; once the insurance company paid $1 million for health services they would no longer cover the individual.

However, recent legislation under the Affordable Care Act of 2009 banned lifetime limits on all health insurance plans. Further enactment of the law in 2013 will limit annual limits as well.

How do I get the best rates for catastrophic health insurance?

Rates will vary between regions and from different individual factors such as overall health and age. The comparison process will help an individual or family to find the best rates for any health insurance coverage. Getting quotes from multiple insurance companies is the best way to get the most affordable rates for any health insurance plan.

Source: www.lowcosthealthinsurance.com

Category: Insurance

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