Catastrophic health insurance, also known as high-deductible health insurance, is a type of health insurance that offers lower premiums but high deductibles. It is intended to cover major medical expenses in case of a catastrophic event or serious illness.
Catastrophic health insurance policies have gained popularity in recent years, especially among young and healthy individuals who are looking to save money on health insurance premiums. In this article, we will explore the pros and cons of catastrophic health insurance, as well as who is eligible for this type of coverage.
Pros of Catastrophic Health Insurance
Lower Premiums
One of the main advantages of catastrophic health insurance is that it offers lower premiums compared to traditional health insurance plans. This is because the policyholder is responsible for a higher portion of the cost of medical expenses. If you are young and healthy, and do not require frequent medical care, a catastrophic health insurance policy may be a good option for you.
Protection against Major Medical Expenses
Catastrophic health insurance policies provide coverage for major medical expenses such as hospitalizations, surgeries, and intensive care. This can provide peace of mind for individuals who are concerned about facing significant medical expenses in the event of a catastrophic illness or injury.
Flexibility
Catastrophic health insurance policies are often more flexible than traditional health insurance plans. They typically do not require the policyholder to choose a primary care physician or obtain referrals for specialist care. This can be beneficial for individuals who prefer to have more control over their healthcare choices.
Cons of Catastrophic Health Insurance
- High Deductibles: The main disadvantage of catastrophic health insurance is that it comes with high deductibles. This means that the policyholder is responsible for a significant portion of their medical expenses before insurance coverage kicks in. For some people, this can be financially burdensome, especially if they require regular medical care.
- Limited Coverage: Catastrophic health insurance policies often have limited coverage for preventative care services such as routine check-ups, immunizations, and screenings. This means that policyholders may be responsible for these costs out of pocket.
- Eligibility: Catastrophic health insurance policies are typically only available to individuals who are under the age of 30, or who have a hardship exemption from the individual mandate of the Affordable Care Act (ACA). This can make it difficult for older individuals or those with pre-existing conditions to access this type of coverage.
Eligibility for Catastrophic Health Insurance
To be eligible for catastrophic health insurance, you must meet certain criteria. These include:
- Age: Catastrophic health insurance is typically only available to individuals who are under the age of 30. However, individuals over the age of 30 may be eligible if they qualify for a hardship exemption from the individual mandate of the ACA.
- Income: To qualify for catastrophic health insurance, you must have a low income. This is defined as earning less than 401% of the federal poverty level. In 2021, this equates to an annual income of $51,040 for an individual or $104,800 for a family of four.
- Hardship Exemption: If you are over the age of 30 and do not qualify for premium tax credits through the ACA, you may be eligible for a hardship exemption. This may include circumstances such as bankruptcy, eviction, or a medical emergency.
Conclusion
Catastrophic health insurance can be a good option for individuals who are young, healthy, and looking to save money on health insurance premiums. However, it is important to consider the high deductibles and limited coverage that come with this type of policy. Additionally, eligibility for catastrophic health insurance is limited, which may make it difficult for some individuals to access this type of coverage. Before making a decision on whether or not to enroll in catastrophic health insurance, it is important to carefully consider your healthcare needs, budget, and eligibility for other types of health insurance.
