Catastrophic Health Insurance
When you shop for health insurance plans, you will come across various types of policies designed to match your financial and healthcare needs. Some policies have a higher monthly premium and a lower out-of-pocket cost when you visit a doctor. Others have a low premium but a very high out-of-pocket cost for regular use.
One such health plan that has a lower premium and a higher deductible is a catastrophic health plan. Here’s everything you need to know about catastrophic insurance plans!
What is a Catastrophic Health Insurance?
Catastrophic Health Insurance is a typical type of medical coverage under the Affordable Care Act (ACA). This is a type of high-deductible health plan for people under 30 or those who qualify for a “hardship exemption.”
Catastrophic plans count as minimum essential coverage. They are designed to protect you during a worst-case scenario. For example, if you get into a medical emergency and your medical costs total thousands of dollars.
The monthly plan premiums of a Catastrophic Health Insurance tend to be lower. However, you are generally required to pay for all health-care costs out of pocket until you reach the plan’s annual deductible, which is usually a couple thousand dollars.
Enrolling for a Catastrophic Insurance Plan!
The eligibility for a Catastrophic Health Insurance Plans is limited to:
- Individuals under 30 years of age before the plan year begins
- Individuals who have a certification from the marketplace that they are exempted from the individual shared responsibility requirement as they do not have an affordable coverage option or they qualify for a hardship exemption.
Is a Catastrophic Insurance Plan right for you?
A Catastrophic Plan may be the right option for you if:
- You want lower premiums or can’t afford more expensive coverage
- You are generally healthy and rarely see the doctor
- You don’t mind having high out-of-pocket costs
- You want to be prepared for high medical bills in a “worst-case scenario”
- You don’t qualify for Medicaid
- You don’t qualify for a subsidy based on your income
The benefits of a Catastrophic Health Insurance!
Catastrophic Health Plans cover the same minimum health benefits as other plans under the Affordable Care Act. These include preventive services, emergency services, prescription drugs, and more.
The difference with the catastrophic plan is that you must pay for all health care costs until you meet a high annual deductible. Only after your out-of-pocket spending reaches the deductible does your plan begins to pay for most covered health care services.
The striking benefits of a Catastrophic Insurance include:
- It offers lower premiums on average than Bronze, Silver, Gold, or Platinum plans
- It covers at least three primary care visits before reaching the deductible
- It includes recommended preventive services without cost sharing
- It protects enrollees with a deductible and maximum out-of-pocket cost limit (the limit changes annually; for 2018, the maximum out-of-pocket cost limit is $7,350 for an individual and $14,700 for a family)