Catastrophic Health Insurance

What is Catastrophic Health Insurance?

Catastrophic health insurance plans typically cover major hospital and medical expenses incurred as the result of a "catastrophe" such as a car accident. Coverage would include hospitalization, surgery and diagnostic tests. Catastrophic health insurance plans are also known as major medical plans. These "major plans" do not provide comprehensive coverage but instead are meant to cover major costs. Catastrophic health insurance does not cover routine or preventative care.

Who Could Benefit from Catastrophic Health Insurance?

People who don't wish to pay high premiums and have enough funds to meet general health expenses often opt for catastrophic health insurance plans. People who are unemployed may have peace of mind in knowing that catastrophic health insurance could cover major medical expenses.

How Do Catastrophic Health Insurance Plans Work?

Most catastrophic health insurance plans have a high deductible combined with a high out-of-pocket annual limit. Deductibles may be in the range of $2,000 - $5,000 though some plans can be found starting at $500 - 1,000. Once you pay the deductible and out-of-pocket annual limit, then the catastrophic health insurance covers the rest. Many policies go as high as $1 million to $3 million dollars but will also have lifetime limits.

Hidden Benefits of Catastrophic Health Insurance Plans

While consumers do not have comprehensive coverage under catastrophic health insurance plans, they are entitled to unique benefits not found in other health insurance policies . First, consumers are in control since they can choose any provider they wish for routine care. They can also place the savings due to lower premiums into a Health Savings Account, a tax free medical savings fund which can be used on any health expenses. This means consumers can make their own choices. As such, consumers can then build significant savings by saving through lower premiums that are typical in catastrophic health insurance. With the trend of increasing premiums for comprehensive coverage in traditional plans , it's a sure bet that more consumers will be placing their money in their Health Savings Accounts and counting on catastrophic health insurance to meet life's emergencies.

Health Insurance Nexus | US : The US Health Insurance Resource, conceptualized in Dec, 2004, is an online portal which provides up-to-date, pertinent information about health insurance in US. Copyright @2005 Honlyn Limited All Rights Reserved

In no event shall Health Insurance Matters be liable to anyone for any inaccuracies, errors or omissions with respect to the information for any damage arising therefrom or occasioned thereby, or for the results obtained from the use of the information. By accessing this site , you are agreeing to the terms of use .