With prices continually on the rise, individuals and families are looking for less costly ways to insure their health. Catastrophic health insurance is a popular and effective way to provide quality major medical insurance at a price more affordable than traditional health plans.
Catastrophic health insurance is simply any health insurance plan that has the primary purpose to cover catastrophic medical expenses, and not so much the day-to-day expenses. Some plans that offer this type of coverage in Utah are; qualified high deductible health plans, The Utah Netcare plan, and deductible first plans with high deductibles.
Because most catastrophic plans don't cover office visits, prescriptions, or emergency room visits until after you've met your deductible, the monthly plan cost is often much lower than traditional health plans.
Most catastrophic plans in Utah do offer preventive care before you are required to meet your deductible (the deductible is waived). This means that you can take care of all of your/your family's annual physicals and preventive testing without much, if any, out-of-pocket cost. The main expenses you would normally pay toward are doctor's office visits, non-preventive diagnostic tests, accidents, surgeries, and hospital visits.
When considering catastrophic health plans, be sure they aren't "discount plans." Discount plans are not insurance plans. Many people I've talked to over the years are in serious financial trouble because they didn't understand what they had purchased until they needed their coverage.
Be conscious of the following plan components when choosing a catastrophic health plan:
The Out-of-Pocket Maximum:
This is the maximum dollar amount you would be responsible to pay, in a worst case scenario, each year. If you are shopping for a family plan, be sure you know the out-of-pocket maximum for the entire family.
Tax Advantages:
Does the plan you are considering offer any tax benefits? "Qualified high deductible health plans" offer the ability to be paired with a health savings account (HSA). This allows you to pay for most of your medical, dental, and vision expenses with pre-tax money. If you or your family could use another tax deduction, this is a benefit you'll want to explore.
Prescription Coverage:
Does the plan cover prescriptions? Some catastrophic plans don't. If it does cover prescriptions, is there a separate deductible, or are prescription expenditures combined with your medical deductible? How much does the plan cover once the prescription coverage kicks in?
Accident Coverage:
Does the plan have any special accident coverage? Most catastrophic plans don't. But, many companies/plans give you the option to add an accident rider, which can cover a specified dollar amount of accidents before you are required to pay toward your deductible each year.
Coinsurance:
This is the percentage your insurance company pays of your medical bills after you meet the deductible. Some common coinsurance percentages are 50%, 80%, and 100%. Of course, the most money you will pay in a year for covered services is equal to your out of pocket maximum.
In conclusion, catastrophic insurance can be an effective money saving tool for individuals or families that don't use their benefits often, are relatively healthy, and can benefit from a tax deduction.
Find out how a catastrophic insurance plan can improve your situation. Request a quote, or contact me for a custom proposal.
Jared J. Balis
Utah Health Insurance Agent
Utah Insurance Advisors
