Go Health
Is Catastrophic Health Insurance a Safe Bet?
For most people who do not get go health insurance coverage from their employer (or for those who balk at paying $300 or more for their monthly premiums), health care coverage can seem completely unaffordable and out of reach. Individual policies comparable to employer-sponsored coverage can reach $1000 a month or more, and even basic coverage can be steep. Many people simply choose to go without health care coverage rather than pay these kinds of bills (and risk serious financial burdens if they become seriously ill). But there is another option: catastrophic health insurance.
Catastrophic health insurance (also called high deductible, or major medical, insurance) provides financial protection against costly health care problems by offering coverage after a high deductible is met. These deductibles – anywhere from $2000 to $5000 or more – mean that you pay more out of pocket for your everyday medical costs (prescriptions, doctor visits, etc.), but you are protected if a major medical expense (i.e., a hospital visit) occurs. You pay more, so the health insurance company pays less, and you both save money. Catastrophic health insurance is typically much cheaper than regular health insurance policies, and many policies can also be used along with a healthcare savings account (HSA), that allows you to save pre-tax earnings to go towards your health-related expenses. Together, these two financial products can protect you against major financial loss in the event of a serious health crisis.
This is a great opportunity for people who do not have grave concerns about their health, but want to be protected from the unknown. Young people new to the work force can often find such a policy for less than $30 a month, and even older individuals can sometimes pay less than $200 a month for a high deductible plan. The rates can be even better for employer-sponsored catastrophic health plans. That is a great deal more affordable than the going rate for full coverage at a lower – or no – deductible.
Are you a good candidate for catastrophic health insurance? That is based entirely on your level of acceptable risk, and your willingness and ability to pay thousands of dollars out of pocket, if necessary. A good idea before choosing any health plan is to consider what your anticipated health needs are for the coming year (or even the next few years). Do you go to your health professional frequently? Do you have an ongoing health condition that requires frequent lab work and doctor visits? Do you need medical supplies on a regular basis? If you know that you will be paying out that $5000 deductible every year, plus another $50 to $100 or more in monthly premiums, it may be a good idea to take another look at full coverage. Though it can be costly, it could make better financial sense for your particular situation.
