Catastrophic insurance, once the health insurance of last resort for college students,

independent young people, the perennially cheap (or risky), and low income, has in

recent times because more and more the option of necessity for many to retain any

kind of health coverage at all. The reasons vary, but much of this shift has had to do

with the economy and a significant number of Americans losing their full-time

employment with health coverage. The migration of so many to part-time work, or full-

time work via cobbled together various part-time jobs has created a need for very

affordable insurance with life-threatening coverage only.Along with cutting out frills,

clothes, extras, and no longer spending on credit cards, Americans have also been

trimming down their health coverage costs, increasingly looking at catastrophic

coverage as the safety net it truly is.

These types of plans are designed by health insurance companies to capture business

at the low end of the market. In many cases, customers are unable to afford the full

cost of regular health care with appointments, full pharmacy coverage, clinic visits, etc.

All they can afford is serious emergency care for immediate health situations such as

heart attacks, car accidents, wounds and trauma, and similar. These types of plans are the true definition of a last

report safety net just above leaving your fate to the local county hospital emergency room for the indigent. The

difference, however, is that you do receive treatment whereas in some cases hospitals may just refuse to admit

indigents who have no apparent means of payment.

Health insurance companies calculate the cost of the plan based on a large pool of applicants so that any expenses

that do occur are spread out. The insurance company bets that for the most part most of the applicants will stay

healthy enough not to need coverage at all. Thus the premiums paid are a 100 percent profit or close to it after

marketing and administration. In those instances were a cost does occur, the plan is limited to the immediate need

and usually does not include long-term care or treatment or rehabilitation costs.

Catastrophic plans generally include coverage of the immediate hospital services, surgical activities for necessary

procedures, intensive care unit treatment, lab and test procedures to determine conditions and related medical

needs. Typical doctor visitations or long-term treatment procedures are not included. These plans also tend to include

a high deductible to keep their monthly premium affordable. It is very common for catastrophic insurance to require

the patient to pay the first $1,000 or $2,000 of services before the plan coverage kicks in. Once in plan, the

catastrophic cost ceiling can be as much as $1 million to $3 million, depending on the plan; however, again this

coverage is only for the immediate care, not subsequent needs such as rehabilitation after the fact.

Catastrophic insurance should never be confused as a coverage option for chronic conditions. Whether it be for

ongoing mental conditions or kidney dialysis or diabetes, these plans do not provide coverage support for ongoing

medical needs.

Introduction - What is Catastrophic Insurance?