CATASTROPHIC INSURANCE: Is Catastrophic Insurance Worth It

catastrophic insurance
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Catastrophic health insurance is a go-to option when you need protection from major medical bills. It’s a low-cost option because you get a high deductible for a low premium. Consequently, you’ll pay for majority of your medical expenses from your pocket before your plan takes over. To know what your catastrophic insurance plan will cover and the role of an adjuster in your plan, read on. 

What is Catastrophic Insurance?

Catastrophic health insurance is a form of health plan that provides coverage for both emergency and preventive medical care. Catastrophic health insurance policies often have cheap monthly rates and a large deductible. You are responsible for any emergency medical care you receive until you have met your deductible, and most preventative care is completely covered. Catastrophic health insurance is accessible to people under 30 who want little coverage and inexpensive monthly rates, as well as those of any age who qualify due to financial hardship.

Catastrophic plans provide the same essential health coverage as other health insurance marketplace plans, including free preventive treatments. If you purchase a catastrophic plan via the Health Insurance Marketplace, you are also entitled to three primary care physician visits.

How Does Catastrophic Insurance Work?

Catastrophic plans, like other insurance plans sold under the ACA, must cover some preventative medical care at no cost to you, whether you have met your deductible or not. They usually consist of basic vaccinations, vaccines, and screenings. 

Before you satisfy your deductible, major medical plans must also cover at least three visits to your primary care doctor.

Aside from those perks, you’ll have to pay for your own medical bills until you reach your deductible. After that, catastrophic insurance must cover the same essential medical benefits as other healthcare marketplace plans, including:

  • Ambulatory patient care
  • Services for the disabled
  • Hospitalization
  • Maternity/newborn care and pregnancy
  • Substance abuse/mental health
  • Prescription medications
  • Services for Rehabilitation
  • Services for laboratories
  • Prevention and wellness services
  • Services for children
  • Extra benefits, such as birth control or lactation assistance
  • Dental or eyesight coverage (depending on your state’s minimal coverage requirements)

Once you’ve met your deductible, you won’t have to pay any coinsurance or copays for any of these services.

The pricing and availability of catastrophic health insurance plans differ by provider and state.

What Does Catastrophic Health Insurance Cover?

Catastrophic insurance helps you pay for unanticipated emergency medical costs that would otherwise result in unpayable medical bills. It also covers critical health benefits such as health screenings, most immunizations, your yearly check-up, and certain kinds of birth control.

Most catastrophic insurance plans also cover at least three visits to a primary care physician.

What Will Catastrophic Health Insurance Not Cover?

Unless you have met your deductible, your catastrophic health insurance plan will not cover emergency care. Depending on the plan, there may be restrictions on preventative care and the number of covered visits to a primary care practitioner (PCP).

It is critical that you understand what is and is not covered by your specific plan.

How To Qualify For Catastrophic Insurance

You must be under 30 years of age or qualify for a hardship exception. An exemption usually indicates that you can’t afford health insurance because you’ve recently been homeless, declared bankruptcy, or meet other qualifying criteria.

How to Obtain Catastrophic health Insurance

Many insurance companies provide catastrophic health care insurance. If you currently have insurance, contact your provider to discover what policies are available and how much they cost. If you do not want to utilize your provider, you can shop on the federal government’s or your state’s healthcare marketplace.

Before you buy a catastrophic plan, keep in mind that your deductible and out-of-pocket expenses will most certainly be higher than they would be with a standard plan.

There are no ACA subsidy funds available to apply toward catastrophic health insurance premiums. If you qualify for a subsidy, a regular bronze or silver plan may cost less and cover more than a catastrophic plan.

Whether you choose a catastrophic plan or something more comprehensive, make sure you can afford it if you have to pay the maximum out-of-pocket price. Catastrophic insurance, like other health plans, can only be purchased during an open enrollment period or after a qualifying incident.

Who Should Purchase Catastrophic Health Insurance?

Catastrophic health insurance policies are affordable, but they are not suitable for everyone. They are best suited for persons who are young and healthy and do not have continuing health concerns that require regular maintenance. If you are unable to purchase a standard health insurance plan, catastrophic plans are a low-cost option that provides coverage in the event of an accident or major sickness that you would otherwise have to pay for yourself.

In the case of alternative options, such as employer-provided coverage or a standard plan under the Affordable Care Act, such insurance plans will provide more comprehensive coverage with smaller deductibles.

If you have any chronic health concerns that necessitate regular doctor visits or treatment, catastrophic health insurance will be prohibitively expensive due to the large deductible. You’d be better off buying a bronze or silver plan through the Health Insurance Marketplace.

What Is the Difference Between Catastrophic and Major Medical Coverage?

Major medical insurance is a word used to designate plans sold on the Health Insurance Marketplace that meet the standards of the Affordable Care Act. While major medical plans have several tier levels, each with its own set of premiums and deductibles, they all cover the same preventive care and core benefits.

Catastrophic policies are also available via the Health Insurance Marketplace, although they have far higher deductibles than major medical plans. Routine medical care is normally paid for out of pocket; a catastrophic plan only gives coverage after you’ve paid thousands and met the deductible.

Catastrophic policies aren’t for everyone; there are age and hardship requirements.

How Do I Get An Exemption To Qualify For Catastrophic Insurance?

Some examples of common hardship qualifications are:

Personal hardship and cost exemptions are the two major types of exemptions that can help you qualify for catastrophic insurance. Depending on the specifics of your situation, you may be eligible for either exemption.

  • Homelessness
  • Bankruptcy
  • Domestic abuse
  • A close relative has died.
  • Utility services are being turned off.
  • Eviction
  • Foreclosure on a house
  • A fire or other natural or man-made disaster that causes significant property destruction.

There are various exemptions for financial hardship. This signifies that your salary is insufficient to cover typical healthcare expenses. If you are eligible for an exemption, you would claim it on your annual tax return and receive a refund.

How Do I Request an Exemption?

You must complete an application and submit it to the exchange in order to apply. Forms are available on the healthcare government website. The Exchange will send you a letter informing you whether or not you qualify for the exemption.

If getting insurance with a cheap monthly premium is important to you, catastrophic insurance may be the way to go. You must be under 30 or qualify for a hardship exception to qualify for catastrophic insurance. The application is approved or denied based on the specifics of your situation.

Can I Receive Catastrophic Health Insurance if I Qualify for an Exemption?

If you are authorized for a hardship or affordability exemption, you will be able to purchase a catastrophic health insurance plan.

Catastrophic health plans can help shield you against significant emergency medical expenses while also providing some vital health benefits such as an annual check-up, certain preventative services, and at least three primary care visits before your deductible has been met. However, if you anticipate expenditures connected with maintaining a chronic health condition, another form of health plan may save you more money.

Read Also: COLLISION INSURANCE: Meaning & Coverages

What Role Do Health Savings Accounts Play?

If you are working and simply have a high-deductible health plan, you can combine a catastrophic health care plan with a health savings account (HSA), which allows you to save tax-free money for medical expenses. Under a catastrophic health insurance plan, an HSA can help you pay for any out-of-pocket health expenses.

What Is the Cost of Catastrophic Health Insurance?

The average monthly cost of a catastrophic health plan is $195. However, your actual cost will vary depending on your area, age, and insurer. That is much cheaper than the cost of a bronze plan acquired via the Health Insurance Marketplace. As of 2022, the lowest-tier bronze plan costs an average of $329 per month.

Short-term insurance policies, which are intended to provide temporary coverage and do not cover pre-existing conditions, are another alternative that can be inexpensive. The monthly premium for short-term insurance are normally approximately $124.

The Role Of An Adjuster In Catastrophic Insurance

A catastrophe adjuster examines property damage for insurance clients following natural catastrophic events or total losses caused by human error. In turn, the adjuster reports the findings to a catastrophic insurance company. In this position, you may research specific claims, evaluate the likely cause of harm, and propose whether or not the claimant should be compensated for their loss. For example, your results can help determine whether damage to a roof or building was caused by storms or typical wear and use. Catastrophe adjusters frequently scale rooftops, investigate basements, and meticulously survey the destruction site while taking comprehensive notes. As a catastrophe adjuster, you may be required to work on-call, sometimes traveling to sites at night and on weekends, in order to offer adjustments as soon as possible after disasters occur. Many catastrophe adjusters also employ industry-specific software to document losses while evaluating each claim’s merits.

How Do I Become a Catastrophe Adjuster?

High school graduation or equivalent, as well as some claims adjusting experience, are required to work as a disaster adjuster. Obtaining a law enforcement degree, enrolling in formal programs that teach investigative skills, or interning under another adjuster can help you gain useful experience and distinguish yourself from other applicants. Some states require catastrophe adjusters to obtain their own licenses rather than work under the license of a catastrophic insurance company, so make sure to investigate the requirements in your jurisdiction. Because this position regularly requires traveling to inspect homes, a valid driver’s license and reliable personal transportation are required. A disaster adjuster’s tasks necessitate great communication skills and attention to detail.

Read Also: INSURANCE CLAIMS ADJUSTER: Jobs & Salary

What does a Catastrophe Adjuster earn?

The average annual salary for a Catastrophe Adjuster in the United States is $93,579 as of July 12, 2022.

In case you need a quick salary calculation, that works out to about $44.99 per hour. This equates to $1,800 a week or $7,798 per month.

The majority of Catastrophe Adjuster salaries in the United States currently range from $52,500 (25th percentile) to $90,000 (75th percentile), with top earners (90th percentile) earning $260,000. The average pay range for a Catastrophe Adjuster ranges significantly (up to $37,500). This implies that there may be several prospects for growth and greater income based on skill level, location, and years of experience.

The claim adjuster jobs that pay the most are independent(CAT) catastrophic insurance claims. After a catastrophic event, such as a natural disaster, working as a CAT insurance adjuster can earn you around $100,000 for 6 to 9 months of work.

The Catastrophe Adjuster employment market in Atlanta, GA, and the surrounding area is quite active, according to recent job posts. A Catastrophe Adjuster in your area earns $92,911 per year on average, which is $668 (1%) less than the national average yearly salary of $93,579. Catastrophe Adjuster wages in Georgia rank 49th out of 50 states nationwide.

In Conclusion,

Catastrophic insurance is a low-cost coverage option that helps you pay for unanticipated emergency medical costs that would otherwise result in unpayable medical bills. With catastrophic health insurance, you can cover critical health benefits such as health screenings, most immunizations, your yearly check-up, and certain kinds of birth control.

Catastrophic Insurance FAQs

What does catastrophic health insurance cost?

The average monthly cost of a catastrophic health plan is $195. However, your cost will vary depending on your area, age, and insurer.

What does an adjuster do?

An insurance adjuster evaluates an insurance claim to decide if the insurer should pay for damage or injuries and, if so, how much.

What makes a good claims adjuster?

Insurance claims adjusters must have great interpersonal skills. An adjuster will interact with people in a variety of moods, from happy and thankful to furious and suspicious.

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