Catastrophic health insurance plans have low monthly premiums and very high deductibles. They may be an affordable way to protect yourself from worst-case scenarios, like getting seriously sick or injured. But you pay most routine medical expenses yourself.
Who can buy a Catastrophic plan
- People under 30
- People age 30 or older with a hardship exemption or affordability exemption (based on Marketplace or job-based insurance being unaffordable)
If you qualify to buy a Catastrophic plan, you’ll see them displayed when you compare plans in the Marketplace.
How much Catastrophic plans cost
- Monthly premiums are usually low, but you can’t use a premium tax credit to reduce your cost. If you qualify for a premium tax credit based on your income, a Bronze or Silver plan is likely to be a better value. Be sure to compare.
- Deductibles — the amount you have to pay yourself for most services before the plan starts to pay anything — are very high.
- After you spend the deductible amount, your insurance company pays for all covered services, with no copayment or coinsurance.
What Catastrophic plans cover
- Catastrophic plans cover the same essential health benefits as other Marketplace plans.
- Like other plans, Catastrophic plans cover certain preventive services at no cost.
- They also cover at least 3 primary care visits per year before you’ve met your deductible.
What kind of medical care is covered by catastrophic health insurance?
Once you meet your plan deductible, catastrophic coverage would pay for accidents, unexpected injuries, sudden emergency illnesses, etc. These plans also provide 100% coverage for certain preventive care services—annual check-up, flu shot, certain types of routine screenings, and more.
Most catastrophic plans also cover you for at least three visits to a PCP.
Do I qualify for catastrophic insurance?
You must either be under 30, or qualify for a hardship exemption. Usually, an exemption means that you can’t afford health care insurance because you’ve recently been homeless, declared bankruptcy, or meet other qualifying criteria.
How do I qualify for an exemption so that I can get catastrophic health coverage?
There are two main types of exemptions that would help you qualify for catastrophic insurance—personal hardship and affordability exemptions. You could qualify for either exemption depending on the details of your specific situation.
Some common hardship qualifications include:
- Homelessness
- Bankruptcy
- Domestic violence
- Death of a close relative
- Utility services being shut off
- Eviction
- Home foreclosure
- A fire, or a natural- or human-caused disaster that results in substantial property damage
There are also affordability exemptions. This means that your income is not enough to be able to afford regular health care coverage. If you qualify for an exemption, you would claim it on your annual tax return and get money back.
How do I apply for an exemption?
To apply, you must fill out an application and submit it to the Exchange. You can find forms on Healthcare.gov. You’ll receive a notification in the mail from the Exchange letting you know if you qualify for the exemption or not.
If your priority is finding insurance with a low monthly fee, catastrophic insurance may be right for you. To qualify for catastrophic insurance, you must be under 30, or, qualify for a hardship exemption. The application is approved or denied based on the details of your specific circumstances.
If I qualify for an exemption, can I get catastrophic health insurance?
If you are approved for either a hardship or affordability exemption, it means you may then get a catastrophic health insurance plan, if you choose.
Catastrophic health plans can help protect you from high emergency medical costs, while also covering some essential health benefits like an annual check-up, certain preventive services, and at least three primary care visits before you have met your deductible. However, if you anticipate costs associated with managing a chronic health condition, you may save more with another type of health plan.
M is insured under a Basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim amount M is eligible for? Determined by the terms of the policy
Which of the following can an individual use their medical flexible spending account to pay for?
Vitamins and supplements
Prescription drugs
Household expenditures
Cosmetic procedures
The first portion of a covered expense that the insured is required to pay before Major Medical Coverage applies is called the
Which of the following BEST describes a Hospital Indemnity policy?
Coverage that reimburses an insured for surgeon expenses
Coverage that pays a stated amount per day of a covered hospitalization
Coverage that replaces lost income due to hospitalization
Coverage that pays for hospital room and board
Coverage that pays a stated amount per day of a covered hospitalization
M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?
$1,600. In this situation, $2,200 - $200 deductible x 80% = $1,600.
Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)?
Employee funds the HRA entirely
Employer funds the HRA entirely
HRA's can be offered with other health plans
HRA's allow reimbursement for eligible medical expenses
Employee funds the HRA entirely. This is inaccurate. HRA plans are employer-funded medical reimbursement plans.
Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness?
Major Medical
Hospital Expense
Surgical Expense
Hospital Income
The phrase "This policy will only pay for a semi-private room" is an example of a(n)
internal limit. Certain types of expenses may have limits placed on the dollar amount of certain services or on the type of service provided.
Which of the following individual health insurance policies will provide the broadest protection?
Hospital Expense
Surgical Expense
Major Medical
Limited Sickness
A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will
Continue Coverage but exclude the heart condition. If the insured did not cite the condition on the application and the insurer did not exclude the condition, the pre-existing condition provision still applies. Exclusions are subject to the "time limit on certain defenses" provision, however.
S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a
High-deductible health plan. To be eligible for a Health Savings Account, an individual must be covered by a high-deductible health plan (HDHP), must not be covered by other health insurance (does not apply to accident insurance, disability, dental care, vision care, long-term care), must not be eligible for Medicare, and can't be claimed as a dependent on someone else's tax return.
Which of the following statements BEST describes dental care indemnity coverage?
Services are reimbursed before the insurer receives the invoice
Services are reimbursed after insurer receives the bill
In-network dentists must always be used
Very limited list of providers
Services are reimbursed after insurer receives the bill
Which of the following phrases refers to the fees charged by a healthcare professional?
Deductible
Coinsurance
Usual, customary, and reasonable expenses
Hospital expense
Usual, customary, and reasonable expenses
All of the following statements about Major Medical benefits are true EXCEPT
The deductible can be expressed as a fixed dollar amount
The benefit period begins only after a specified amount of expenses have accrued
Benefits are generally expressed as a percentage of eligible expenses
Benefits have no maximum limit
Benefits have no maximum limit, They do have a limit
A Health Reimbursement Arrangement MUST be established
By the employer. HRAs are employer-established benefit plans that must be funded by the employer.
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
Dread disease insurance. Dread disease insurance provides benefits for ONLY specific types of illnesses such as cancer or stroke.
Which of the following types of policies frequently uses the term "deductible"?
Major Medical policy
Basic Surgical policy
Basic Hospital policy
Worker's Compensation
Major Medical policy. Most major medical benefits begin to be paid after the deductible is satisfied.
An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?
$3,000. In this situation, the insured is responsible for $1,000 deductible + 20% of the remaining bill = $3,000.
In Major Medical Expense policies, what is the intent of a Stop Loss provision?
Limits an insured's out-of-pocket medical expenses
A characteristic of Preferred Provider Organizations (PPOs) would be
Discounted fees for the patient. Under Preferred Provider Organizations, patient fees are discounted in return for using listed providers.