Individual and Family
What is a Catastrophic Health Plan?
Published on January 29, 2019
For many individuals, choosing the right type of health insurance can be a slightly overwhelming experience. Fortunately, there are a wide variety of health plans that can provide individuals and their families with the coverage needed throughout daily life and in the event of emergencies. For younger individuals, and those not requiring consistent medical care, a catastrophic health plan might be the ideal option.
Who can buy a catastrophic health plan?
A catastrophic health plan, typically has low monthly premiums with high deductibles. This type of plan is ideal for individuals who want to protect themselves during worst-case scenarios. For example, catastrophic health plans are particularly helpful in the event of an unexpected and prolonged illness or injury. However, catastrophic health plans are often less helpful for “ordinary” or “routine” medical expenses, since the individual will be responsible for paying the majority of “ordinary” medical expenses.
In this vein, a catastrophic health plan isn’t for everyone. In fact, there are specific eligibility requirements, including:
- Individuals under the age of 30 may apply.
- Individuals with a hardship or affordability exemption may apply.
How much will a catastrophic health plan cost?
The cost of catastrophic health plans will vary. However, as a general rule of thumb, most catastrophic health plans feature low monthly premiums. It is important to note that a premium tax credit can’t be used to reduce the monthly premium for catastrophic health plans. With this in mind, if an individual does qualify for a premium tax credit, then the bronze or silver metal levels will typically offer a better value.
In addition to monthly premiums, catastrophic health plans typically feature higher deductibles. In 2019, the majority of catastrophic health plans had a deductible of $7,900, which means that individuals are required to spend the latter figure before the insurance provider will begin to pay for all covered services. Once again, it is a great idea to compare the cost of catastrophic health plans with metal levels to determine the best value based on cost vs. services covered.
What does a catastrophic health plan cover?
Each catastrophic health plan will cover slightly different services. With this in mind, all catastrophic health plans will cover the same 10 essential health benefits that are offered by other Obamacare plans. These services include, but are not necessarily limited to: inpatient and outpatient hospital care, doctors’ services, pregnancy and childbirth, mental health services, and prescription drug coverage. It is important to note that the level of coverage will depend on the selected catastrophic plan.
Catastrophic health plans also cover a variety of preventative services. These preventative services could include shots and screening tests. Finally, catastrophic health plans cover at least three primary care visits per year. These visits are covered even if the individual hasn’t met their deductible. Keep in mind, that like other metal levels, primary care visits should be made with an in-network doctor to avoid additional costs.
How does a catastrophic health plan compare to other types of plans?
A catastrophic health plan has similarities and differences to the metal level plans. Metal level plans include: bronze, silver, gold, and platinum. The basics of each type of metal level are as follows:
- Bronze. — The bronze plan typically offers the lowest monthly premium with the highest costs when care is needed. This metal level also features higher deductibles, but are a good choice for individuals who want to protect themselves in worst-case medical scenarios.
- Silver. — The silver plan typically offers moderate monthly premiums with moderate costs when care is needed. This metal level also features lower deductibles than bronze plans.
- Gold. — The gold plan typically offers high monthly premiums with low costs when care is needed. This metal level also features lower deductibles than bronze and silver plans. It is typically a good choice for individuals who require a lot of medical care throughout the year.
- Platinum. — The platinum plan typically has the highest monthly premiums with the lowest costs when care is needed. This metal level also features the lowest deductible, which means that the insurance provider typically starts paying for costs far earlier than the other metal levels. This type of plan is typically a good choice for individuals that need a lot of care throughout the year and can afford to pay a high monthly premium.
- Catastrophic. — The catastrophic plan features low monthly premiums with higher deductibles. It is typically a good choice for individuals that need protection during the worst-case medical scenarios, such as unexpected injuries or prolonged illness.
In conclusion, determining if a catastrophic health plan is right for you, will require you to analyze your medical needs vs. the amount of money that you want to spend throughout the year on medical expenses. In this vein, catastrophic health plans are typically the optimal solution for individuals who need medical coverage during the worst-case scenarios. Before making a decision, be sure to compare the coverage offered by a catastrophe health plan against the coverage offered by various metallic health plans.