Catastrophic insurance is healthcare or accident insurance that kicks in when medical bills and costs go over a pre-set limit by the health care insurance policy you are covered by. Usually a deductible needs to be met before the catastrophic health insurance kicks in. For example if your health coverage requires you to pay 10% of all health care costs up to $15,000 out-of-pocket each year but your medical bills are beyond that amount the catastrophic portion of the policy will kick in and pay up to its limits. These limits are usually pre-set and can be anywhere from $1 million to $5 million or more, depending on your insurance policy.
There are catastrophic plans that apply to other things besides health care and medical costs, such as a catastrophic crop failure policy for farmers or catastrophic homeowners policies that cover earthquakes, floods, tornados and other disasters, but this article addresses only the medical insurance side of catastrophic policies.Many health coverage plans offered by employers will have some sort of catastrophic accident or medical insurance. Sometimes the employee pays for the insurance premiums and sometimes the employer will pay for them. If you don’t have an option for employer paid insurance and you enjoy good health and seldom go to the doctor you might consider a catastrophic health insurance policy with a high deductible. These catastrophic plans have deductibles ranging from $2,500 to $10,000 per person per year (these vary and will effect your premium amount) and you pay for doctor visits out of your own pocket.
An annual medical checkup and a year’s supply of thyroid medicine, for an example, might cost you $400 out of pocket each year, but that might not even equal the cost of one month’s premium on an individual health plan. The catastrophic policy would kick in for any accidents or illnesses that make your health care costs rise above your annual deductible. These catastrophic policies might not be the best choice for those with health problems that need frequent visits to the doctor to monitor. For those with high blood pressure or heart problems, for example, a traditional health insurance policy still remains your best bet.