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What Is The Cost Of Catastrophic Health Insurance

Average Cost Of Catastrophic Health Insurance For Emergency Coverage

The term “catastrophic health insurance” does little to make you feel confident. The Affordable Care Act (ACA) created a specific category of primary medical health insurance covering individuals or families where all members are under the age of 30. Before the ACA defined this term, insurance providers used “Catastrophic Health Insurance” to mean a broad swathe of health insurance plans and medical indemnity plans that provided an emergency safety net for individuals. It was expected that these plans would take care of high medical care costs so that it didn’t affect the holders of those plans in a lasting and tangible way.

Understanding Today’s Catastrophic Health Coverage

The catastrophic health coverage plan has to fulfill all the requirements of an ACA plan. However, after three medical visits, the catch is that the individual will have used up his or her deductible. There are significantly higher out-of-pocket costs for these plans. On the plus side, the high out-of-pocket costs are balanced by a much lower premium. The premium is even lower than what you’re likely to play with the ACA “Metal-Rated” (Bronze, Silver, Gold, and Platinum) plans from ACA. Catastrophic health plans are very much like ACA metal-rated plans with a few notable exceptions:

  • Primary Care Visits: Your catastrophic health insurance plan must cover at least three primary care visits before it exhausts your deductible.
  • Avoiding Tax Penalties: Since catastrophic health plans are up to ACA standard, being enrolled in one will ensure that you don’t fall victim to tax penalties for being uninsured.
  • No Subsidies: While the plan does conform to ACA standards, persons in a catastrophic health plan don’t qualify for government subsidies.
  • Below 30: If you intend to use catastrophic coverage for your health insurance, you and all members of your family that the insurance covers must be below the age of 30. Exemptions may be made for individuals who are facing financial hardship.

Catastrophic health insurance is an option that individuals who don’t have any insurance whatsoever may want to consider. The high out-of-pocket costs may be a deterrent, but it’s a choice between having ACA-approved health insurance or paying tax penalties for not being on a health insurance plan.

What Does Catastrophic Insurance Typically Cover

Different providers usually have other coverage elements for their catastrophic insurance. These are separate and apart from the ACA-approved coverage plans they offer but can be added on to those plans if you so wish.

  • Critical Illness: The insurance you take usually pays out a lump sum if you’re diagnosed with cancer, stroke, heart attack, and any other number of “dread diseases” or acute illnesses.
  • Accident Insurance: If you’re the victim of an accident, the coverage has a payout that’s dedicated to covering you in the event of being injured this way. This payment is in addition to your automobile accident coverage. You can potentially receive compensation from both of these insurance sources in the case of an accident.
  • Fixed-benefit indemnity medical insurance: This type of coverage pays out if you suffer specific illnesses or medical injuries that your plan caters for.

It’s important to note that these additional forms of catastrophic coverage don’t conform to the ACA standards. If you decide to take one of these coverage options, you may still be liable to pay penalties for not being covered under an ACA-approved plan.

The Potential Costs of Catastrophic Health Insurance

As with most other insurance plans, having a low premium is almost guaranteed to have a high deductible. In this case, the deductible can be several thousand, while the premium may be less than two hundred dollars a month. Catastrophic insurance plans are a gamble, allowing an individual to conform to the ACA and avoid penalties while still being minimally covered. However, since you pay your doctor’s bill’s entire cost, they aren’t genuinely beneficial to the people they cover.

In many cases, individuals may opt for Catastrophic insurance coverage if they just turned 26 and are no longer covered under their parents’ medical insurance plans. It’s a useful, low-payment stopgap method to avoid penalties from not having health insurance. Still, it has the downside that it’s only valid for four years (until the holder turns thirty) and doesn’t cover medical visits. These make it a good temporary measure, but not something that should be a permanent fixture.

While the catastrophic plan doesn’t cover doctor’s visits, it does cover preventative screenings. In keeping with the ACA, all approved plans must offer individual screenings to quality as an ACA plan. Unlike the metal-rated insurance coverage of the ACA, the catastrophic insurance plan has no out-of-pocket maximum. Average out-of-pocket costs for the year 2019 came up to a whopping $7,148. The catastrophic plan serves a unique purpose by allowing holders to have temporary coverage but limiting what they can do with that coverage and leaving most of the private health insurance costs on the insurance holder.

Why Choose Catastrophic Insurance

The name says it all – if you’re going to be in a life-and-death situation and you ne3ed medical coverage, catastrophic insurance is there for you. Depending on your provider, you may have additional add-ons and may be covered for other types of illnesses or accidents. However, if you’re looking for a long-term insurance solution, you’re much better off with a metal-rated individual ACA plan. You may pay more per month than a catastrophic plan, but you’ll have safeguards in place, like a maximum out-of-pocket value and health coverage, as well as more manageable deductibles that won’t leave your bank account empty.

How do you find the catastrophic plan that’s right for you? You can go through each provider manually and make a note of the coverage options that suit your needs and their average costs. If you intend to do this, it may take you a few hours to plan out your insurance and narrow down the option. My Private Health Insurance offers a better way. Visit our website today and see the power of our direct comparison tool to show you precisely what you’re getting and what you’re paying with each plan.