A catastrophic or major medical insurance plan is a deductible and comparatively cheaper form of health insurance with an element of speculation to it. A deductible is the amount you pay out of your pocket for medical expenses before the insurer pays the balance. For instance, if your deductible is $5,000 and the hospital bill is $12,000, the insurance company will pay only $7,000. The general rule is the higher the deductible, the lower the premium. When you opt for this plan, you’re gambling that you will not face major medical problems in the near future.
It is a calculated risk. According to one survey, the annual medical expenses of 90% of the U.S. population are less than $2000; for 73%of the population, it is below $500.
Two groups that normally opt for catastrophic health insurance are young people in their twenties who are confident of their health condition, and older men between fifty and sixty-five who are still waiting for Medicare eligibility.
Catastrophic health insurance coverage is only meant to protect against major hospital charges and not routine medical expenses. It normally does not cover maternity care, doctors visits...
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