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What is Catastrophic Health Insurance?

A lot of young people opt for catastrophic health insurance because it seems like a good deal. However, this type of health insurance came about as a way for you to deal with medical emergencies. Catastrophic medical insurance plans also cover the costs of preventative care entirely. Unfortunately, despite the low cost of monthly premiums, this particular type of healthcare does have its drawbacks. We’ll explore what catastrophic healthcare insurance offers to clients, what you need to qualify for this type of insurance, and advise you if it’s something you might need.

What does Catastrophic Health Insurance Cover?

When you have an unexpected medical emergency, catastrophic healthcare insurance helps you deal with the massive bills that come with such a crisis. The high cost of healthcare in the US means that, in most emergencies, the average American can’t possibly afford the bills associated with an emergency visit. Catastrophic healthcare aims to ease that burden. It also offers clients free preventative healthcare. Screenings for cancer and diabetes, your annual checkup, and even select methods of birth control may be covered under your catastrophic health insurance plan.

Catastrophic health insurance might seem like a godsend, but there’s a massive caveat that many people miss when they inspect their options. Catastrophic healthcare requires you to meet your deductible before the company takes over coverage. In many cases, this deductible can be massive, and it may take a long time before you even meet it. Additionally, some plans have clauses limiting how many visits you can make to a preventative care physician or the number of visits they cover to your primary care provider.

Who Can Buy Catastrophic Health Insurance?

The market for catastrophic health coverage is limited to a narrow window. If you’d like to purchase catastrophic healthcare coverage, you need to be below the age of thirty (30). Occasionally, special exemptions are made for those who can’t otherwise afford marketplace or job-based insurance coverage. These exemptions come in two main types, affordability exemptions, and personal hardship exemptions. Depending on your particular details, you may qualify for one or the other.

Hardship exemptions deal with problems that affect your everyday life. Eviction, bankruptcy, domestic violence, and even homelessness count towards the things that hardship exemptions consider. If you’re the victim of a fire or something that has caused massive and widespread damage to your home, you may also qualify for catastrophic coverage under the hardship exemption.

The affordability exemption is slightly different. If you are in a job, but your earnings prevent you from affording regular healthcare, you may qualify. Catastrophic healthcare insurance was designed to help those who can’t buy traditional insurance or may not be eligible for insurance sponsored by their employers. If you do qualify for the exemption, you can claim it on your tax return and get the money refunded.

How Do I Apply for an Exemption?

If you think you might qualify for an exemption, you can fill out the forms on and submit it to the Exchange. The Exchange will send an email to you informing you whether you qualify for an exemption or not. It’s important to note that catastrophic insurance is not your typical type of long-term insurance. It’s hedging your bets on whether you’ll be in an accident or not. It offers you coverage, but factors like the excessive deductible required before the insurance company takes over might be a bad financial decision. In the case of an emergency, the financial stresses it presents can be crippling.

If you’re qualified for a catastrophic healthcare plan, you can then choose your choice provider. Qualification for this plan doesn’t mean that it’s the only plan that you can afford. However, the low monthly payments can be quite alluring, especially for those who don’t earn a lot. Each provider also has its own details on what preventative care is covered in their plans. A detailed assessment of any catastrophic private health insurance plan, including its coverage details, is crucial to determine if it’s worth investing in.

Should Someone Below 30 Take Out Catastrophic Health Insurance?

The financial decisions of young people stick with them throughout their entire lives. If you’re someone below the age of thirty, a catastrophic healthcare plan might benefit you in the long run. The free preventative care visits will help to keep you healthy for longer. Since it’s unlikely that you’ll end up in any incidents that require the coverage, you might be able to maintain the catastrophic health insurance until you no longer qualify for it. However, if the unexpected happens, the massive deductible associated with these plans may cripple you financially. The balance between low premiums and extremely high deductibles may not be worth the cost. Catastrophic healthcare insurance is a good idea if you’re in a situation where you can’t afford better, but if you can, there are much better long-term plans for people of your age.

The Cost of Catastrophic Plans

Typically, the cost of your catastrophic plan’s monthly premium is much lower than any other long-term plan. There’s usually no copays or coinsurance fees. You don’t even have to worry about any hidden fees attached to catastrophic health insurance. However, the deductible for these plans can run into the thousands. You’re required to pay the deductible upon entry, and the cost of your recovery will hinge on meeting that fee. Once you’ve covered the deductible, the health insurance provider will take over to cover your medical bills completely.

The Choice of a Catastrophic Healthcare Plan

Each of the major healthcare insurance providers has their own version of the catastrophic healthcare plan. They all differ in the amount of primary care physician visits or preventative care visits you’re allowed per year. Additionally, their deductible costs may vary significantly. My Private Health Insurance gives you the chance to explore the plans that these companies offer to find one that you can get on board with. What are you waiting for? Find health insurance that suits your needs today.