Health insurance doesn’t have to be about a full, comprehensive policy. Sometimes, a policy that covers the possibility of an accident or major surgery is all that we really need. With catastrophic insurance coverage you can get this important coverage without the high premiums sometimes associated with regular health insurance policies.
Catastrophic insurance plans (also called major medical plans) do not cover any expenses related to preventative care, minor wound care, or any kind of health monitoring service. Instead, they cover some of the expenses associated with major, catastrophic illnesses and accidents. If you are sent to emergency room, it is likely that much of that expense will be covered by your catastrophic policy. Other expenses covered include hospital expenses like room, board and incidentals, surgical expenses, and physician expenses.
Like any insurance policy, catastrophic plans have limits and deductibles. You will be required to pay the deductible amount out of pocket, then the insurance company will step in and pay their portion of your expenses, up to the limit.
Because the insurable incidents covered by catastrophic plans are so limited, the premiums tend to be low and widely affordable. As with any policy, choosing a high deductible and low limit further limits the risk of expense to the insurance company and will result in even lower rates-but as with any insurance policy, consumers must make sure that they choose a deductible they can afford and a limit that is reasonable and still offers a relevant benefit.
Catastrophic policies are not for everyone. If you have a chronic illness or injury, a catastrophic policy can step in when a major medical incident occurs, but will not give you the day-to-day and preventative coverage that you may need in order to live a long and healthy life. But if you are unable to secure a regular health insurance policy and don’t yet qualify to join the high risk pool for your state, then it may be a helpful alternative.