By Leader Nancy Pelosi from Flickr.com
Catastrophic Health Insurance Can Save You Money
If you’re one of those healthy people that never get ill, you might consider going without health insurance, but you’ll find yourself in a pickle if you have the random accident or an illness that takes a serious turn. You’re far better off paying for catastrophic health insurance, where you only have to worry about paying for a high deductible. The insurance company pays for the balance of the bill.
If you want one of the plans that can offer an inexpensive alternative to health insurance, consider catastrophic health insurance and a health savings account. The catastrophic health insurance, often referred to a high deductible health plan, or HDHP, is the perfect partner for the health savings account, the HSA. In fact, you can’t have a health savings account without a catastrophic health insurance plan.
The catastrophic health insurance normally has a high deductible, money out of your pocket before the insurance company pays, followed by a section of co-insurance where you pay a percentage of the bill and the insurance company pays the other part. Once you reach the maximum annual out of pocket amount, the most you’ll pay toward your health care in one year, the insurance company pays the entire bill.
Where the health savings account comes into play is paying for the deductible. The money you put in the health savings account is deductible on your taxes and grows tax-free. When you remove the money to pay bills for medical services, it also comes out of the account tax-free, so it’s a win-win situation. Best of all, if you seldom have health problems or never use your catastrophic health insurance or the health savings account, the money rolls over to the following year. The money is yours to spend for any medical issue.
If you need eyeglasses or dental work, you can use the health savings account. Of course, the money you spend doesn’t go against the deductible on your catastrophic health insurance, but you do get to pay for the dental work or eyeglasses on a tax-free basis. The account can even cover items sold over the counter, such as cold remedies or herbal supplements.
Catastrophic health insurance costs far less because the potential to use the policy decreases as the deductible increases. That means the insurance company doesn’t have the expense of handling claims or paying them. In return, they discount the premium. Often people with few illnesses find this is the best type of health insurance for their situation. The smaller bills throughout the year are minor compared to the savings they have on premiums.
You can find the most inexpensive catastrophic health insurance by comparing prices. Always use the same deductible and co-insurance amount when you compare rates. While one company can offer a reduced rate on a specific policy in one area, their prices may be higher in your area, so getting recommendations from friends and family may not always be the wisest.
Look for catastrophic health insurance to provide inexpensive but necessary coverage. You won’t be sorry you did. It can provide that comfort you have knowing you have coverage in the event of a major illness or accident.