Pros and Cons of Catastrophic Health Insurance

Catastrophic health insurance is a very common type of insurance coverage in the market today. This type of coverage has some definite benefits associated with it. At the same time, there are a few drawbacks that you will want to understand. Here are some of the pros and cons that come with having catastrophic health insurance.

Pros

One of the biggest benefits that you will receive by purchasing this type of health insurance coverage is being covered for large medical expenses. If you try to live without any type of health insurance, you are basically setting yourself up for a massive failure. If you have a car accident or some other unexpected medical problem, you could rack up huge medical bills. If you required some type of serious surgery, it would not be out of the ordinary to accumulate medical bills of over $100,000. If you do not have any type of coverage, this could lead to filing bankruptcy. With catastrophic health insurance, you know that they are going to cover all of your large medical bills. This provides you with some assurance about your financial situation and eliminates a major source of worry for many individuals.

Another big benefit of this type of coverage is that you can afford it. This type of health insurance is going to be the most affordable option that you have. You are going to get the lowest monthly premiums that you can with this option. Since you are asking for coverage only on the big expenses, the insurance company can lower the amount of premiums that they have to charge you. If you are on a fixed income, this can be a big advantage for you.

With this type of insurance coverage, you will be able to qualify for a health savings account. This is a type of savings account that allows you to contribute pre-tax dollars. You will then be able to use this money to pay for qualified medical expenses.

Cons

One of the biggest drawbacks with this type of coverage is that you will have a high deductible. Most of the time, this deductible is going to be $2000 or more per year. Many people have deductibles in excess of $5000 with this type of policy. While this would not be completely financially crippling if you had to pay it, it still would cause you some financial pain.

The high deductibles on this type of insurance cause many people to postpone medical care. When this happens, it can lead to more serious medical conditions and possibly even death.

Another problem with this type of coverage is that it does not help you with doctor visits or prescriptions in many cases. All of these things will usually be paid for out of pocket, and the money will go towards your deductible. This means that you could have to spend quite a bit on a regular basis for small health expenses.

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