Catastrophic Health Insurance
Catastrophic health insurance is a form of high deductible health plan designed to cover the cost of medical emergencies when they occur. This doesn’t mean to say though that other things such as routine physician appointments and prescriptions aren’t covered, because they are. In fact everything that a traditional health insurance policy covers is also covered by catastrophic health insurance.
There are three main points to make about catastrophic health insurance:
- The monthly premiums are invariably lower than you would pay for a similar traditional health insurance policy. The exact amount you save is dependent on numerous factors. However it is often in the region of 20-30 percent.
- The low monthly premiums are balanced by the high deductible you pay whenever you use the policy benefits. So for example, a traditional policy may pay 80 percent of the cost of a routine physician appointment, whereas a catastrophic health insurance policy may only pay 30 percent. In some cases routine appointments may even be classed as an out-of-pocket expense.
- Once you have met your deductible for a particular service then the insurance provider pays the rest. This is very beneficial in emergencies where the cost of an ambulance, emergency treatment, x-rays and other diagnostic tests, surgery and long term hospital care all become payable. There is rarely a maximum claim allowance on catastrophic health insurance policies and so they continue paying for as long as you need medical attention.
There are two ways to buy catastrophic health insurance. The first is as a comprehensive policy that covers everything a traditional policy would cover but with much higher maximum payouts, while the second is as a supplemental policy that you tag onto an existing health insurance plan. Either way, you are guaranteed enough coverage to pay for high cost medical procedures but with lower than average premium rates.
Because the deductible is so high on this type of health insurance it is aimed primarily at healthy people who rarely need physician appointments or prescription medications. The main goal of catastrophic health insurance is to pay any huge medical bills that come as a consequence of a catastrophe, not to pay for everyday medical needs. So, if you are prone to illness and visit your primary care giver on a regular basis then a traditional health insurance plan is more advisable, and you can always add on a catastrophic plan as a supplemental.