Catastrophic health insurance plans provide basic coverage in case of major illnesses or injuries. They have very high deductibles but low monthly premiums. Understanding how catastrophic health plans work and who they fit can help you evaluate options.
What is Catastrophic Health Insurance?
Catastrophic health plans are a form of low-cost, high deductible insurance that protects against worst-case medical scenarios. Key features include:
- Very high deductibles, often thousands of dollars you pay before coverage kicks in.
- Low monthly premiums from minimal coverage before the deductible.
- Primarily only covers high cost hospital and emergency care.
- Does not pay for routine or preventive medical visits and screenings.
- Offers core protection against financial catastrophe in case of an unexpected illness, accident, or injury.
Catastrophic plans provide a basic coverage safety net if disaster strikes. But they leave you responsible for most normal healthcare costs until the deductible is met.
Also, Check this as well Health Insurance Premiums Plans
Catastrophic Health Plan Eligibility
To qualify for catastrophic health plan enrollment, you must be:
- Under age 30, or
- Age 30 or older with a special affordability exemption from the individual mandate penalty. Exemptions are granted based on financial hardship limiting other options.
This limits catastrophic plan eligibility primarily to younger, healthier consumers needing minimal temporarily coverage along with older individuals facing extenuating circumstances.
Catastrophic Plan Out-of-Pocket Costs
Very high deductibles mean you pay most medical costs out-of-pocket until reaching your annual limit:
- The 2023 standard deductible amount is $9,100 for an individual and $18,200 for a family. After this, the plan starts paying claims.
- You pay 100% of all healthcare expenses until meeting the deductible unless certain exceptions like free preventive care apply.
- There is no coinsurance. The plan pays 100% of covered costs after the deductible is satisfied, up to plan limits.
Be prepared to cover most normal medical spending until reaching the catastrophic deductible threshold.
Catastrophic Health Plan Covered Services
Catastrophic health plans provide limited benefits:
- Hospital stays, surgeries and other inpatient services are covered after the deductible.
- Emergency room visits for true medical emergencies are covered after the deductible.
- Typically 3 primary care office visits per year have a copay before deductible. After these 3 visits, additional primary care applies to deductible.
- Preventive care like vaccines, cancer screenings and checkups are fully covered before deductible.
That’s about it for what’s included. Review plan details closely for other potential exceptions or limitations to the deductible. Everything else is generally excluded until you meet the deductible spending amount.
Catastrophic Health Plan Provider Networks
Most catastrophic health insurance plans utilize large provider networks to ensure access, since you pay out-of-pocket for most services until meeting deductibles.
- Networks include a broad range of hospitals, facilities, labs and healthcare providers.
- Services are only covered when seeing in-network participating providers.
- Seeing out-of-network doctors results in you having to pay 100% of the total charges with no insurer contribution.
Unlike short term health insurance, catastrophic plan networks are robust since they must meet ACA network adequacy standards.
Catastrophic Health Plan Premium Costs
Monthly premiums for catastrophic health plans are very affordable, since you take on substantial risk until exceeding deductibles:
- Average monthly premiums range from $200 – $300 for an individual. Still much less than unsubsidized marketplace plans.
- Families can expect to pay $500 – $700 per month for full catastrophic coverage.
- Premiums stay low because the plan only covers high cost services after deductible.
- Subsidies are not available for catastrophic health plans.
While inexpensive, make sure you budget to cover routine medical expenses out-of-pocket until your deductible is satisfied.
Using Catastrophic Health Insurance
Here are some key considerations if relying on catastrophic medical coverage:
- Use free preventive care to stay up to date on services like annual checkups, cancer screenings, vaccinations and lab work. These are fully covered.
- Set aside savings for expected costs like doctor visits, medications, dental care and vision expenses. You pay out-of-pocket until meeting deductibles.
- Shop around for best prices on uncovered services since you pay 100% until the deductible.
- Enroll in health sharing programs or member cash pricing networks to try to access some services at lower negotiated group rates.
- Evaluate separating dental, vision, life and disability coverage needs through other non-medical supplemental plans.
Catastrophic health plans focus benefits on worst-case scenarios. You must self-manage other expected medical costs not included.
Pros and Cons of Catastrophic Health Insurance
Advantages of catastrophic coverage include:
- Very low monthly premiums.
- Financial protection against severe illnesses and injuries.
- Coverage if hospitalized or needing surgery.
- Incentive to maintain your health since you pay for routine costs.
- No coverage for primary, specialty, urgent care or prescriptions until meeting deductibles.
- Preventive care is covered but maintaining health long-term is still a challenge.
- Risk of incurring tax penalties without comprehensive insurance.
- May still accumulate medical debt from coinsurance despite having coverage.
Catastrophic plans serve key purposes but require planning and discipline to complement the minimal coverage.
Transitioning from Catastrophic Insurance
Options when moving beyond catastrophic coverage include:
- Provides comprehensive major medical benefits.
- May receive premium subsidies if income eligible.
- Choices range from lower cost bronze plans to more generous platinum plans based on out-of-pocket preferences.
- Gains access to group rates and employer contributions.
- Allows adding dependents like children and spouse.
- Often offers choice between PPO, HMO and HDHP options.
- Available when turn 65 and enroll in Medicare.
- Original Medicare covers hospital, preventive, and medical insurance.
- Can add prescription drug and supplemental coverage.
Don’t stay on catastrophic insurance indefinitely. Transition as income and age milestones open doors to comprehensive benefits and financial assistance.
Supplementing Catastrophic Health Plans
Potential options to pair with catastrophic policies for added coverage include:
- Accident insurance – Additional cash benefits and premium discounts on comprehensive accident medical protection.
- Dental insurance – Covers dentist visits, x-rays, cleanings, fillings and other non-covered dental care.
- Vision insurance – Plans cover annual eye exams, some eyewear costs and discounts on procedures like LASIK.
- Critical illness insurance – Limited extra cash payouts upon diagnosis of major conditions like cancer, stroke and heart attacks.
- Telehealth – Low-cost 24/7 phone or video physician access for minor illnesses and questions.
- Rx discount plans – Save 10-80% on medications through free pharmacy discount cards.
Having supplemental options prevents gaps in essential healthcare access and mitigates risks until graduating to more comprehensive major medical insurance.
Alternatives to Catastrophic Health Insurance
Other options beyond catastrophic plans include:
Short Term Health Plans
- Temporary coverage for up to 12 months.
- Low premium costs but limited benefits.
- Pre-existing conditions often not covered.
Health Sharing Ministries
- Faith-based medical cost sharing among members.
- Affordable monthly contributions.
- Limited coverage, exclusions may apply.
Direct Primary Care (DPC)
- Flat monthly fees directly to primary care clinics for basic services.
- Lower cost access for limited scope of needs.
- Doesn’t cover hospitalizations, specialists, emergencies.
Health Discount Plans
- Membership programs offering reduced rates on healthcare services through contracted providers.
- Not insurance – simply attempts to cut costs on specific expenses.
Review all alternatives along with catastrophic plans to create optimal coverage customized to needs and budget.
Finding Catastrophic Health Insurance
You can obtain catastrophic health plan quotes and compare options:
- Through public health insurance exchanges like Healthcare.gov during yearly open enrollment periods.
- By working with brokers or online agencies like eHealthInsurance.com that screen and provide plan choice guidance.
- Using marketplace technology platforms like Stride Health and Goco.io that customize and curate plan results based on your data inputs.
- From government resources like Healthcare.gov that outline available catastrophic plans by state and county.
Doing your homework is key with any health coverage, but especially when considering limited benefit plans. Get all details upfront to evaluate suitability.
Is Catastrophic Health Insurance Right for Me?
Catastrophic health plans tend to fit these situations best:
- Young adults no longer on a parent’s plan needing low-cost temporary coverage.
- Early retirees needing a bridge to Medicare eligibility.
- Secondary protection for specific health risks paired with sharing ministries or direct care models.
- Those with religious or philosophical reasons for avoiding comprehensive insurance.
- Low-income households unable to afford unsubsidized marketplace plan premiums.
Catastrophic coverage provides an option when all other doors to attainable health benefits seem closed. But shop carefully and compare alternatives before committing.
Frequently Asked Questions About Catastrophic Health Insurance
What is the deductible for catastrophic health plans in 2023?
$9,100 for individual coverage and $18,200 for family coverage. These amounts will be updated by the government annually. You must pay healthcare expenses out-of-pocket until reaching the deductible amount before the plan contributes.
Does a catastrophic health plan qualify as minimum essential coverage?
Yes, catastrophic plans are considered comprehensive major medical coverage meeting ACA requirements. Having catastrophic insurance satisfies the individual mandate to avoid tax penalties since technically you are covered. But ensure the very limited benefits match your needs before enrolling.
What medical expenses are covered before the deductible on a catastrophic plan?
Preventive services like immunizations, cancer screenings and annual physicals are fully covered without having to meet the deductible first. You can also access primary care physician visits up to 3 times per year via copays before hitting your deductible. But after those 3 PCP visits, the deductible applies.
Can I get subsidies or tax credits on a catastrophic health insurance plan?
No, catastrophic health plans are not eligible for government subsidies or premium tax credits. If income-eligible for tax credits, you must enroll in a metal tier Bronze, Silver, Gold or Platinum marketplace plan to qualify for and claim premium assistance. Catastrophic plans provide minimal coverage at unsubsidized rates.
Who is eligible to enroll in a catastrophic health insurance plan?
To enroll in catastrophic coverage, you must be under age 30 or over 30 with a special affordability exemption granted due to financial hardship or other circumstances where comprehensive plan premiums exceed a certain percentage of income. Eligibility is restricted compared to standard marketplace plans.
Catastrophic health plans serve very specific needs. Weigh limitations carefully against comprehensive insurance options to ensure appropriate coverage.