How to Buy Catastrophic-Care Health Insurance

Many Americans purchase health insurance coverage on their own. From the various health-care plans from which consumers may choose, a catastrophic-care plan is one option. Such a plan is designed to provide health-care coverage primarily if you become seriously ill. Before purchasing this type of health insurance plan, investigate the costs and the type of coverage you would receive carefully.

Instructions

• 1

  Find out exactly what is covered and what is not. Catastrophic-care plans are designed to cover major illnesses and events such as accidents. Plan terms should spell out which diseases are covered and which are not. For example, one plan might provide coverage in case of a cancer diagnosis but exclude coverage for type II diabetes. Plan administration officials should provide you with a detailed list of the type of coverage you can expect.

• 2

  Research all expected costs. A catastrophic-care plan is also known as a high-deductible plan. High-deductible plans require the policyholder to pay a specific amount before coverage starts. The plan might require the insured to pay thousands of dollars out of pocket before seeing a penny in claims money. The exact amount you will be required to pay should be spelled out in writing before you buy the plan. Set aside that exact amount in an interest-bearing account.

• 3

  Investigate whether the plan is a group plan or an individual policy. Catastrophic-care insurance is either administered by a group plan or bought by the individual. Group catastrophic health care plans must adhere to HIPAA regulations. HIPAA stands for the Heath Insurance Portability and Accountability Act. Under this law, health insurance providers must adhere to certain rules and regulations. You cannot be denied access to a catastrophic-care plan if you buy it as part of a group. However, the insurer can require you to wait for coverage for a certain period of time, such as three months.

• 4

  Research combining your catastrophic-care plan with an additional health-care plan. A catastrophic health care plan can be just one piece of your health-care coverage rather than all of it. Catastrophic-care plans generally do not reimburse you if you see a doctor for minor medical issues. Many do not offer prescription drug coverage, either. You can buy additional health insurance that offers basic access to doctors but places caps on the amount of annual reimbursement for medical expenses. You can also buy policies that provide you with prescription drug coverage. Some companies and employers offer all three types of policies.