Catastrophic health insurance is a form of health insurance that is specifically designed to cover the costs related to emergency and critical health needs that are difficult to pay out of pocket. Most catastrophic health insurance plans can be gotten at a low cost, and they offer the same health benefits as health insurance.
However, this type of health insurance plan features high deductibles in the event where you need health care services. But, once you meet the deductible, your policy will pay for all the health care services that you need.
How Does Catastrophic Health Insurance Work?
The way a catastrophic health insurance plan is similar to that of standard health insurance. Under a catastrophic health plan, policyholders will be charged a premium for the coverage they’ll receive once the policy is activated.
It covers hospitalization, emergency services, prescription drugs, and doctor appointments, depending on the type of policy you have. Just like most types of insurance, catastrophic health insurance has deductibles that policyholders are expected to meet.
A deductible is the amount you are expected to pay in a year before your health plan begins to cover the cost and other expenses associated with your healthcare.
One of the advantages of catastrophic health insurance is that it does not include coinsurance compared to regular health insurance.
In order to get enough clarity about what your catastrophic health plan is going to be like, you should seek more information from your insurer.
What Does Catastrophic Health Insurance Cover?
A standard catastrophic health insurance plan covers the following:
- Emergency services.
- Outpatient care.
- Laboratory services.
- Preventive and wellness services.
- Prescription drugs.
- Chronic disease management.
- Pediatric services.
- Pregnancy and maternity care.
- Substance abuse disorder services.
- Mental health services.
- Rehabilitative services
The coverage is not just limited to these alone. You can explore other coverage options by asking your insurance provider about other levels of coverage under catastrophic health insurance.
What It Doesn’t Cover?
If you do not meet up with the deductibles, your catastrophic health plan will not offer coverage for emergency care.
In addition, there are also limits to the preventive care you receive and the number of times you visit a primary health care provider. It all depends on the health plan and the insurance company you are working with.
That being said, it is essential to have a proper understanding of what your health plan covers and what it does not. This would enable you to know the limitations of the coverage on your policy.
Who Qualifies to Purchase Catastrophic Health Coverage?
In order to be issued catastrophic health policy, you have to meet the following requirement:
- Must be under the age of 30.
- Must have qualified for a hardship exemption.
If you fall into any of these two categories, then you are good to go! However, before you can qualify for an exemption, you are required to submit an application.
Once you’ve done that, you will be given an Exemption Certificate Number which will be used when enrolling in a catastrophic health plan.
How Much Does It Cost To Buy A Catastrophic Health Plan?
Frankly speaking, the cost of a catastrophic health plan is not the same in all insurance companies. However, we have been able to analyze the average cost for catastrophic health insurance from different insurance companies across the world. Here’s a sneak peek:
| Age | Average cost for catastrophic health insurance plan per month |
| 21 | $248 |
| 27 | $260 |
| 30 | $282 |
| 40 | $317 |
| 50 | $443 |
| 60 | $673 |
Pros of Catastrophic Health Insurance
Catastrophic health policy offers a vast array of coverage to individuals who seek protection for unexpected accidents; some of them include:
- Low premiums.
- Deductibles and out-of-pocket are the same cost.
- It is available on the ACA marketplace.
- There is no coinsurance.
- It features comprehensive coverage.
Cons
While catastrophic health coverage offers a wide range of benefits, it also has its downsides. Outlined below are some of the disadvantages:
- It has a complex eligibility requirement.
- Individuals are not allowed to use ACA premium tax credit to reduce their premiums.
- High deductibles.
When purchasing a catastrophic health plan, it is important to consider both the advantages and disadvantages. This would enable you to weigh your options and see if it’s a good decision or if you should try other alternatives.
FAQs
What type of medical care is covered by catastrophic health insurance?
Generally, a catastrophic health plan covers accidents and injuries incurred from any form of accident. It also covers sudden emergency illnesses and preventive care services. However, the medical care offered by this type of insurance is dependent on the type of policy you have and if you meet the deductible.
What does catastrophic health plan cover?
Catastrophic health coverage is designed to help policyholders pay for expenses associated with unforeseen events like accidents, unexpected injuries, emergency medical costs, and preventive services. A standard catastrophic health plan pays for basic health expenses and also covers health benefits.
How do I qualify for catastrophic health insurance?
To qualify for catastrophic health coverage, you must be under or have attained the age of 30. You can also qualify for this type of insurance if you meet the requirement for a hardship exemption. An exemption typically denotes that you cannot afford health insurance as a result of being homeless or going bankrupt.
