How it Works Financially

Most health insurance plans for regular coverage range from $1,000 to $2,000 a month for a family of four. This pays for all

services, big and small, as needed and determined by the member and medical staff.

Catastrophic insurance premiums are far lower than regular coverage, hovering around $200 to $300 per month. As noted

earlier, one of the features required to obtain such a low premium is what called a deductible. The deductible is the amount

you as the covered member are required to pay first before coverage kicks in. This effectively keeps the insurance company

free of having to pay for small costs that are not in and of themselves catastrophic in nature.

The clear trade-off for the consumer is that for most of the time, their money in theory stays in pocket. However, when one

does get sick with regular conditions, just about every treatment and pharmaceutical is out-of-pocket. Even a trip to the

emergency room could be denied later as not meeting the definition of catastrophic, depending on the plan’s terms and

what it will cover. That can be a bit of a rude surprise during recovery.

Types of Plans

There are two main categories that catastrophic health insurance plans are sold under. The first is comprehensive. This

version is the closest type to a regular health plan with all of its varied services. You can still access visits, pharmaceuticals,

and treatments, but you pay out of pocket until your deductible is met either at an annual limit or in each instance. Pricing is

far lower than a regular plan but a comprehensive policy can still cost more than the next version.

The second category is supplemental. This type of plan is an

add-on to an existing policy already in place. Supplemental

plans tend to be coverage specific to types of treatment,

equipment, and medical care.

Most people who use a catastrophic insurance plan are going to

start with a comprehensive policy to get basic coverage. They

will, once the deductible is taken care of, receive critical medical

care as needed which generally covers the hospital room,

testing, surgery and critical care. Discretionary treatments are

not included.

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.

Types of Catastrophic Plans, and how they work financially.