What Is A Catastrophic Health Plan? Do You Need One?

There are an array of health insurance plans to choose from, and it can be difficult to choose the one that meets your exact needs and budget. If you are healthy, then considering a catastrophic health insurance plan is ideal. It is a very affordable way to protect yourself in a worst-case scenario, but generally not used because of your good health. There are different variables to consider with a catastrophic plan.

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If you are healthy, then a catastrophic health insurance plan is your best option to save money while being covered.

What It Covers

Catastrophic plans cover the essential health benefits, such as preventive care, at no cost. The essential benefits are:

  • Ambulatory patient services 
  • Emergency services
  • Hospitalization
  • Pregnancy, maternity, and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
  • Lab work
  • Preventive and wellness services, and chronic disease management
  • Pediatric services, including oral and vision care

They also cover at least 3 primary care visits per year before you meet your deductible.

Who Can Buy A Catastrophic Plan

If a person cannot afford a regular health insurance plan, then a catastrophic plan is the way to go due to the lower monthly premiums. These plans were once considered the go-to for young, healthy people to get in order to avoid the individual mandate penalty. Even though the penalty is gone, it is still considered a go-to for young, healthy people because it is affordable and provides basic healthcare. 

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If you have an income that is low, and you cannot afford health insurance, then a catastrophic plan is ideal.

People who can buy a catastrophic plan are:

  • Healthy Individuals Under 30- If you are under 30 years old, and rarely get sick, then this kind of plan is perfect for you. 
  • Individuals With Hardships- If you have an income that is low, and you cannot afford health insurance, then a catastrophic plan is the way to go. You can qualify for a hardship if you:
    • Were homeless
    • Evicted
    • Faced foreclosure
    • Filed for bankruptcy
    • Suffered the death of a family member
    • Faced fire, flood, or any other disaster damage to your property
    • Are a victim of domestic violence
    • Had a lot of medical debt

Costs

Catastrophic health plans are basically a second term for high deductible plans. They are available in all states, and can be quite expensive if an individual is unhealthy. High deductible plans are known for their high out-of-pocket costs and low premiums. 

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A catastrophic plan offers essential coverage for healthy people, but has a high deductible.

Deductibles for these plans were $7,900 for 2019, and for this year have gone up to $8,150. Once you meet your deductible, then the insurance company will pay for all covered services. As you can see, the deductibles are quite high, so if you are healthy and do not need lab work, surgery, or anything more than preventive care, you will never have to pay this deductible.

Should You Consider One?

Catastrophic plans are for people who are generally healthy, are under 30, or who have a hardship exemption. Because they have high deductibles and low monthly payments, it is typical to consider this type of plan if you are healthy and do not see the doctor often.

These plans are not the best option for most people because of the high deductible. They do not cover much more than preventive care. When considering a catastrophic plan, be sure to assess your health, qualifications, and be prepared to pay for the high deductible if there is an unexpected emergency or health issue.

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