Could a Catastrophic Health Insurance Plan Be Right for You? The Pros and Cons

Are you struggling to find health insurance that works for your budget?

If you’re under 30 or have any of these hardship exemptions, you might qualify for a catastrophic health insurance plan.

Catastrophic plans have lower monthly premium payments and basically protect you from very high, or catastrophic, medical costs. You’ll pay for all of your medical costs out of pocket, up to your deductible amount, which is generally thousands of dollars.

Here are the pros and cons of catastrophic plans:

Pro: Low monthly premium costs. Con: High deductible.

With a catastrophic plan, your costs are low as long as you don’t use a lot of health services. If you end up needing medical care, you could end up paying a lot of money. Again, these plans mostly protect you from worst-case scenarios.

Pro: Free primary and preventive care. Con: Emergency or care beyond preventive services won’t be covered until your high deductible is met.

Because of the Affordable Care Act, even catastrophic plans now cover three primary care visits per year at no cost, even before you’ve met your deductible. They also cover some preventive services. However, if you have a pre-existing medical condition or need prescription drugs, you’ll pay in full for doctor visits and refills until your deductible is met.

Pro: You’ll have insurance. Con: You won’t qualify for financial incentives.

While a catastrophic plan will provide coverage, purchasing a catastrophic plan means you can’t qualify for tax credits or lower out-of-pocket costs based on your income. You also won’t be able to pair a catastrophic plan with a health savings account. If you qualify for tax credits, they could potentially lower monthly premium costs on a more comprehensive plan, making a higher level of care and coverage affordable.

If you don’t use a lot of medical services, have no pre-existing medical conditions and you don’t take any regular prescription drugs, a catastrophic plan might be the right fit for you. However, if you expect to need regular care, buying a more comprehensive plan and lowering your monthly premiums with a subsidy might make more sense

 

 

For more health insurance tips read our Health Insurance 101 blog series, visit bcbsm.com/101 or follow the hashtag #Covered101 on our social channels. If you have a specific question, please submit your query online through our Customer Action Center

 Photo credit: dawolf