A catastrophic or major medical insurance plan is a type of health insurance that has a deductible and is cheaper than other types. It also has an element of guesswork. A deductible is the amount of money you have to pay out of pocket for health care costs before your insurance company pays the rest. For example, if your deductible is $5,000 and your hospital bill is $12,000, the insurance company will only pay $7,000. In general, if the deductible is higher, the premium will be lower. When you choose this plan, you are taking a chance that you won't have any major health problems soon.
It's a calculated chance. One survey found that 90 percent of people in the U.S. spend less than $2,000 on health care each year, and 73 percent spend less than $500.
People in their twenties who are sure of their health and men between the ages of fifty and sixty-five who are not yet eligible for Medicare are two types of people who often choose catastrophic health insurance.
Catastrophic health insurance is only meant to protect you from big hospital bills, not from small ones. It usually doesn't cover care for pregnant women, visits to the doctor, or prescription drugs. Most of the time, the coverage doesn't apply to certain pre-existing medical conditions or cases of mental illness or drug abuse. You can buy catastrophic health insurance as an individual plan or as part of a group plan. In fact, it seems like employers are trying to get their workers to choose this kind of health insurance. The most you could ever win in a lifetime could be $3 million.
Rates depend on where you live and how old you are. In some states, you could save as much as two-thirds on your premiums. For example, a 21-year-old woman who doesn't smoke may only have to pay $30 a month for her premium.
Before making a choice, it's a good idea to talk to insurance companies and/or agents for advice and compare quotes.
