Catastrophic Health Insurance
Another way to look at high deductible insurance plans is by thinking of them as catastrophic health insurance. The concept behind the catastrophic health insurance plan is the same as your car insurance. Let’s say you had a flat tire, the insurance company is not going to cover the costs of a new tire and labor, however, if you get into an accident the insurance company will pay for the repairs to your car. A catastrophic health insurance plan works the same way. Instead of forking over the bill to the health insurance companies for every doctors visit you would pay out of pocket for very minor aches and pains. For example, if you came down with the cold and wanted to get some prescription medication from your doctor, with a catastrophic health insurance plan you would be expected to pay the doctors visit and all expense associated with that visit out of pocket. Now lets say you wake up one morning and you feel a sharp pain and pointing pain in your stomach. Throughout the day the pain just keeps getting worse and worse, so you decide to visit the doctor. The doctor says that your have appendicitis and your appendix needs to be removed ASAP. Well with out any type of health insurance the cost of surgery and one nights stay at the hospital will cost your anywhere from $100,000 to $200,000, but if you had a catastrophic health insurance plan your surgery costs would be covered after you have paid your deductible.
Why a catastrophic health insurance plan and not the traditional health insurance plans? The reasoning behind a catastrophic health insurance plan is simple, lower and affordable premiums. A healthy 20 year old male would expect to pay around $200 dollars a month for health insurance. The same male would expect to pay around $50 dollars a month for catastrophic health insurance. Let’s run a quick scenario for this healthy male. This male wakes up one morning and is not feeling to well, he decides to visit the doctor. He goes to the doctor and pays his co-pay (assuming he has traditional health insurance) of $10. For the rest of the year this male visits the doctor maybe 3 more times. So adding up his health care costs minus the cost of medication for the year it comes out to 12×200 (for the premium) + 4×10 (for the co-pay each time)= $2440 a year. Now let’s say this same male has catastrophic health insurance. An average visit to the doctor costs about $200 dollars out of pocket. So if this person had catastrophic health insurance then his health care costs for the year would amount to 4×200 (for the doctor visits payed out of pocket) + 12×50 (catastrophic health insurance premiums for the year) = $1400. As you can see the catastrophic health insurance plan is a money saver. However, people who visit the doctor often will find that the catastrophic health insurance plans are more pricier than the traditional health insurance plans. So, if you are a healthy person and know that you do not visit the doctor than often then a catastrophic health insurance plan is perfect for you.