“Catastrophic health plan” may just be the scariest-sounding health insurance term out there. But put your fear aside — these policies actually come with some noteworthy benefits that may make them just what you need.
What Is a Catastrophic Health Plan?
Despite the worst-case scenario name, catastrophic plans offer similar essential benefits to those offered by other standard health insurance plans, including several primary care visits and other kinds of preventive care at no extra expense. They overlap in some areas with high-deductible health plans, although catastrophic plans have their own specific requirements. To enroll, you must either:
- Be under 30 years old, or
- Be over 30 years old and meet the guidelines for a hardship exemption
If you generally only need basic care and can cover most of your smaller expenses out of pocket, this plan type might work for you. Aside from maintaining comprehensive coverage, the biggest advantage of these plans is the cost — catastrophic plans tend to have low monthly premiums.
What Else Do I Need to Know?
If you do end up needing a lot of care, say if you find yourself regularly seeing specialists, then this plan can become more expensive. That’s because you’ll have to drop your own cash for almost all of the services you use, and meeting those high deductibles — along with copays and other out-of-pocket costs — can take a toll on your finances.
Bottom line? For the right person at the right time, these plans can bring true peace of mind at the right price. If the unexpected happens, you’ll be protected from a major catastrophe. Make sure you’re aware of the tools at your disposal that help make health care accessible. A catastrophic plan, especially paired with a strong emergency savings fund, will keep you covered when you need it.