Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Catastrophic health insurance is the bare minimum coverage anyone should have to safeguard against healthcare costs. While most health insurance is not cheap, health care costs are extremely expensive.

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From routine trips to the doctor to extended hospital stays, the average health care bill is $8,000 per year. Without insurance, this could literally break the bank for many people. Health insurance helps keep your health care costs lower by offering you various benefits in exchange for a premium.

This expense is usually well worth the trade. Catastrophic health insurance is a less expensive alternative to complete health care coverage by offering benefits for catastrophe type situations only.

Who Needs Catastrophic Health Insurance

Some people cannot afford health insurance but no one can afford to be without it. If you have a relatively healthy lifestyle and a good record of minimal visits to the doctor, you may think you don’t need health insurance. However, not having health insurance is very risky and could put you in financial jeopardy.

You may be safely willing to forgo basic health insurance and pay for a doctor’s visit out of pocket if the need should ever arise. But what happens when something unplanned and more serious takes place?

Catastrophes can happen anytime to anyone. A sprained ankle, a broken bone, a car accident, or even a serious illness or disease such as pneumonia or cancer could put you in financial ruin if you are not prepared for it.

These events cannot be planned and while you don’t have to run to the doctor at the first sign of a sniffle, you should see a doctor routinely for preventive care. Any incident that ends up with repeat doctor visits, lab work, x-rays, emergency room visits, surgeries, and hospital stays can become very expensive if you don’t have any health insurance to help offset the costs.

By purchasing catastrophe insurance instead of basic health care insurance, you can save money on your monthly premiums an overall health insurance rates. The benefits you receive will be less advantageous than basic health care insurance, such as your doctor visits may not be covered. However, if you find yourself in the emergency room and you have catastrophic insurance you can recuperate a little easier knowing that some of your medical costs will be relieved by your insurance.

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The Costs of Catastrophic Health Insurance

The costs of catastrophic health insurance vary with the level of benefits you select and the deductible you are willing to pay. As with all insurance policies, the higher the deductible that you choose for your health insurance the lower your premium will be. This means that if you choose a health insurance plan with a $1000 deductible your premium could be as low as $300 per month, versus a $500 deductible plan with a $400 per month premium.

Choosing a higher deductible is one way to save money on insurance provided you are comfortable with the amount of the deductible. If the deductible is so high that you would not be able to afford it in an emergency then your catastrophe insurance will not be as valuable. You need to be able to pay your deductible first in order for the insurance company to start paying out the plan benefits.

A good way to ensure you have the deductible is to set that money aside in a separate savings account. If you decide to purchase a catastrophic health insurance plan with a high deductible but don’t actually have that deductible amount ready, then start saving toward that goal.

Open an interest bearing savings account and deposit a set amount each week or month until your deductible has been reached. Continue to contribute to this account to help offset any possible copayments that will be needed.

The Benefits of Catastrophic Health Insurance

Having any type of health insurance is better than having none. If you can’t afford the premiums for basic health care that covers routine doctor visits then having catastrophic health insurance is another option.

You will have to pay more out of pocket if the need ever arises, but you will have health care benefits that would otherwise leave you financially insecure or medically untreated. If you ever need serious medical treatment, having catastrophic health insurance will help you get the treatment you need by helping to pay for those bills.

Every health insurance plan is different and most plans aren’t actually called catastrophic health insurance. What catastrophic health insurance coverage relates to is a level of health insurance benefits that comes with a higher deductible and a more expensive co-payment in exchange for lesser benefits and a smaller premium.

This type of health insurance will not usually help you pay for routine office visits or minor procedures, but it will prove very valuable if you are ever in a serious medical condition where your medical bills exceed your deductible. Do not end up in the hospital without any insurance at all. Buy catastrophic health insurance now by comparing online insurance quotes from various insurance carriers.

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