Health insurance is something that is provided by almost every employer. There are far too many people who experience difficulty in maintaining their health and hence incur huge medical bills. To tackle the huge medical bills, employers introduced health insurance plans through which employees can avail free medical cover. The only problem for a health insurance plan is that the employee must make contributions in order to receive the benefits from the insurance plan. In many cases, people may find themselves in situations where money is tight and would not actually like to pay for a health insurance premium. In these cases, there is another option – catastrophic health insurance policy.
How Do Catastrophic Health Insurance Plans work?
These policies are meant for people who may be in relatively good health but do not have a health insurance policy. Essentially, what these plans do is that they provide health insurance for people in case of an emergency but to avail of this insurance policy, an individual must already be in relatively good health. Catastrophic health insurance policies should not be used as a safety net in the event of an emergency because the medical expense would then be too high.
This plan may be highly applicable for students have just across the 18 year barrier and fall outside the boundaries of the parents’ medical insurance policies. In other words, catastrophic health insurance can also be used as health insurance for students in case of an emergency. It is a common misconception that catastrophic insurance policies are free of cost. Although they may appear to be free of cost, there is relatively very low premium that has to be paid on a monthly basis towards these plans.
In some cases, catastrophic insurance policies may pay only for the part of the medical bills that you incur. It would be well to note that patients has policies will not always be 100% of the medical bills. For these insurance policies to pay anything towards your medical books, the deductible should be anywhere in the range of $300 – $5000. Deductible is the amount that is payable towards medical bills before the health insurance benefits can be enjoyed. With respect to these insurance policies, they offer fairly low premiums and require relatively high deductibles from the individual.
Catastrophic health policies are often clubbed with health savings accounts which the tax advantaged medical savings accounts which are available to all taxpayers in the United States. Health savings account rules are similar to the catastrophic insurance policies.
Catastrophic Health Insurance Policies
Maximum benefit can be obtained from the catastrophic insurance if an individual does not require regular medical treatment or regular prescription drugs which are expensive. These policies can also be beneficial if an individual does not foresee any surgery or frequent illnesses in the immediate future. This is because these policies are highly deductible policies in which most of the expense is paid out of the individual’s pocket. This is the reason as to why the premium for catastrophic health insurance policies is also very low. However, if the health of the individual is not very good, in those situations, choosing other plans like Medicaid or other health insurance policies will always be a better idea.