Catastrophic Health Insurance

Catastrophic health insurance, which is also called major medical insurance, covers major medical and hospital expenses, but it does not pay the cost for doctor visits, prescription drugs, or maternity care. Most of these plans do cover hospital stays, surgeries, intensive care, X-rays and other hospital fees, though you should be certain to read your policy carefully in order to be certain it provides the coverage you need.

Paying for It

These type of plans often described has a very high deductible with a low monthly premium because it is meant to only be used when a major illness or injury occurs. With a catastrophic medical insurance plan, you will pay out-of-pocket for visits to the doctor and for any prescription drugs needed. But it does cover major hospitalization costs and major medical expenses. Most of these plans also cover diagnostic testing, X-rays and lab tests that are associated with the illness or injury.

Catastrophic health insurance is the least expensive of all health insurance. Deductibles, which are the amount you pay for a claim before your insurance company will pay, begin at $500 and go up to $5,000 or more. Most plans have a cap, of one to three million dollars. Once the cap is reached you will no longer receive benefits and the policy will be canceled.

Who Should Get It?

Pre-existing conditions such as AIDS, heart disease, diabetes, multiple sclerosis, or emphysema, may make it impossible for you to obtain coverage.

These plans are not for everyone. Most people who have it are in relatively good health, do not take prescription drugs, and are young adults or people in the fifties or sixties.

Young adults tend to buy the coverage if they are self-employed or if their employer does not offer them insurance. Older adults who purchase a policy tend to be healthier and take little medication or do not take any prescription medicines. Also they tend to want to save money on their premiums, and prefer to pay out-of-pocket for their medical needs. This type of insurance may also be beneficial to retired people who are not yet eligible for Medicare benefits.

Before obtaining a policy ask yourself:

• What is the cost?
• What does the plan cover and what are the benefits?
• Will I be able to afford to pay out of pocket for doctor visits and prescriptions drugs?
• Can I afford the deductible?
• Do I have any pre-existing conditions?
• Do I get sick often?

With a major medical insurance plan you will be expected to pay all your medical needs until the expenses reach the cost of your deductible. If you eliminate your coverage to make your monthly premiums cost less, you will be taking a big risk on how much money you will have to spend on all of your health care needs.

These policies are not for everyone and careful consideration should be taken before deciding on such a healthcare insurance plan.

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