If you are at a point in your life where insurance premiums are starting to become financially overburdening, or you are simply wondering why you are paying high premiums for insurance cover that you seem to never need, then catastrophic health insurance coverage may be perfect for you. It is a type of coverage that features extremely low premiums, and so if you want a way out of shouldering the burden of high premiums without losing basic medical cover, this is a plan that you should definitely consider going for.
Here is what you need to know about catastrophic health insurance.
When does it make the most sense to get catastrophic health insurance?
Initially, this type of insurance came in handy for people who wanted to avoid incurring the individual mandate penalty that came with the Affordable Care Act. Since having even the most basic of coverage, people who were either in hardships or young people who were healthy and didn’t need significant coverage found it attractive as a convenient way to avoid the penalty. However, currently, this penalty is not in effect and so this is no longer the main reason why most people opt for this type of insurance coverage.
So, when exactly is it a good idea to seek catastrophic insurance coverage?
If you have recently been fired, lost your home, or experienced any type of financial hardship and you are struggling to meet your monthly premium obligations, then it might be time to consider this type of coverage. It typically features relatively low premiums. Therefore, it makes it affordable for people who would have otherwise gone without insurance, to get insurance coverage.
Instead of exposing yourself to unlimited financial risk in case something goes wrong, you can opt for this coverage. And while it does not provide as comprehensive a coverage as one would get from a typical health insurance plan, it provides a viable alternative to people who would have otherwise been left unprotected.
In addition to people who are experiencing financial hardship, the other class of people who find catastrophic insurance coverage attractive are young people who are generally healthy and who don’t have a high risk of needing expensive medical treatment. Therefore, if you are young and healthy, you may find it to be financially convenient to get the basic coverage that this type of insurance offers. The low premiums that come with it will make getting cover more financially manageable.
Is there a downside?
It is important to note that while you get to pay really low premiums, there is a downside to this type of coverage. The low premiums are usually accompanied by high deductibles. This means that the insurance coverage only kicks in once you have spent a given amount of money on your medical expenses. For example, if the deductible is $7,000, you will have to cover that amount yourself, and it is only when your medical costs exceed that amount will the insurer step in. Therefore, it in a way offers limited coverage since it, in essence, provides coverage only for cases that feature runaway medical costs.
Unlike other forms of health insurance, this insurance cover is not available to everyone. Access to it is restricted. In order to avoid exploitation, there are limits as to who can be covered by this type of insurance.
People who are below the age of 30 have access to this type of coverage without any other qualifications being necessary. Therefore, they can easily enjoy the benefit of having to pay the low premiums that come with this type of coverage no matter their circumstances.
However, things are different for people who are 30 years and above. Anyone that falls in this category needs to meet the requirements that qualify them for a hardship exemption. Generally, this means that they have to be in some kind of financial hardship. For example, if you filed for bankruptcy before, experienced the death of a family member, are a domestic violence victim, were facing eviction, homelessness, or if you are facing eviction, you qualify for this exemption.
It is important to note that financial hardship alone is not enough for you to qualify for this type of insurance. There is an application process that you have to go through, and it is only after getting approved will you be able to access the catastrophic health insurance plan options that are available to you.
What if you don’t meet your deductible?
In order to enjoy the essential health benefits that are provided for this coverage, you need to be able to meet your deductible. Therefore, if you fail to, you will not be able to enjoy coverage benefits for services like rehabilitation services, prescription drugs, hospitalization, emergency services, and ambulatory patient services.
However, there are things that you can still enjoy even before meeting your deductible. You will receive coverage for certain medical services. Some of the things that will be covered in spite of whether you have met your deductible or not include a limited number of visits to a primary care physician, screenings, immunizations, and basic shots.