What Is Catastrophic Health Insurance?

Health insurance for catastrophic events is a low-cost solution for protection against high medical costs. You will receive a reduced premium in return for a high deductible. You will therefore be responsible for covering the majority of your medical expenses until you do so.

You still have options if you are unable to afford health insurance from your workplace or the Health Insurance Exchange. A basic health plan that includes necessary medical insurance for unforeseen diseases or accidents may be available for purchase. Before you buy, find out how these plans operate and what the potential fees can be.

Definition and Example of Catastrophic Health Insurance

These policies are made to guard you against paying a lot out of cash for catastrophic medical catastrophes. The Affordable Care Act (ACA) still requires them to provide minimal basic benefits, but you will typically have large out-of-pocket expenses before meeting your (very high) deductible.

Contrary to certain basic policies, catastrophic plans only cover a small percentage of medical costs up until your deductible is met. They won’t be very helpful if you have copays, prescription prices, or other payments that are your responsibility.

Of course, one serious accident may rapidly get you to your deductible, at which time you would be protected, but it would cost a lot of money to get there. However, some of those expenses will be covered by your cheap rates.

Plans for catastrophe are only available for a few groups: people under age 30; those who qualify under a hardship exemption; or those who cannot afford employer or marketplace insurance options.

How Does Catastrophic Health Insurance Work

No matter if you have reached your deductible or not, catastrophic plans are required to provide certain preventative care at no additional cost to you, just like all insurance plans provided under the ACA. They often consist of tests, vaccines, and simple jabs. has a complete list available.

Before you reach your deductible, major medical insurers are required to pay for at least three visits to your primary care physician.

Other than those advantages, you’ll be responsible for paying your own medical bills up until your deductible is met. The same essential health benefits as other health marketplace policies must then be covered by catastrophic insurance, including:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Pregnancy and maternity/newborn care
  • Mental health/substance abuse
  • Prescription drugs
  • Rehabilitative services
  • Laboratory services
  • Preventive/wellness services
  • Pediatric services
  • Additional benefits, such as birth control or breastfeeding coverage
  • Dental or vision coverage (based on your state’s requirements for minimum coverage)

You won’t have to pay a coinsurance or copay for any of these services once your deductible has been met.

How Do HSAs Fit In?

You can combine a catastrophic health care plan with a health savings account (HSA), which enables you to save aside tax-free money to use toward medical expenses if you are employed and only have access to a high-deductible health plan. In the event that you have catastrophic health insurance coverage, an HSA can assist you in covering any out-of-pocket medical bills.

How to Get Catastrophic Health Insurance

Numerous insurance companies provide catastrophic health insurance. If you already have insurance, ask your provider about the plans it offers and their prices. You can shop on your state’s or the federal government’s healthcare marketplace if you don’t want to use your provider.

It’s important to consider your deductible and out-of-pocket costs before purchasing a catastrophic plan higher than if you had a traditional plan.

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