Catastrophic & Major Medical Insurance

(9,700 Reasons to Get a Catastrophic Health Policy)

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The total cost for all hospital stays in the U.S. in 2010 was $375.9 billion, and the average cost per stay was $9,700, according to a statistical brief released in 2013 by the Healthcare Cost and Utilization Project. 

Of the 20 most expensive conditions to treat, septicemia (also known as "sepsis," a condition where the body has a severe response to bacteria or other germs) tops the list, and has been the fastest rising percentage change since 1997.

If you’ve been searching for an affordable way to make sure you are prepared for a serious health condition, major medical insurance coverage may be what you need. Also known as catastrophic insurance, this coverage can be an excellent emergency safety net. 

There are key coverage differences between major medical and health insurance, so it’s important that you fully understand the policy you are considering and know that it meets your needs before you purchase.

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Who Can Benefit from Major Medical Insurance?

  • A person who is self-employed
  • A person who is healthy but on a budget
  • People who are seeking supplemental coverage
  • Someone concerned only with emergency coverage
  • Someone whose employer doesn’t offer health insurance
  • An early retiree who doesn’t qualify for Medicare

What Does Major Medical Insurance Cover?

You will find that most major medical insurance companies offer plans that cover catastrophic circumstances, like hospital stays and large medical expenses. 

You may also hear this plan referred to as a “hospital-only” plan or short term major medical insurance because they have a very high deductible but put a cap on annual out-of-pocket expenses to keep long-term and expensive medical care affordable.

Because of the requirements of the Affordable Healthcare Act, all major medical insurance carriers now include coverage for preventive care and most immunizations, but these policies are not available on the state or federal healthcare exchanges and must be purchased on the private market.

If you purchase a major medical insurance policy, you may be eligible to use a health savings account, also known as an HSA. For many people, this provides a method to pay for the healthcare expenses that aren’t covered by a major medical policy. 

There are a few important details to understand. For example, you cannot use your HSA funds to pay your health insurance premiums unless you’re unemployed. You’re responsible for contributions to the HSA, but any money left in the account accrues tax free interest.

While major medical insurance quotes might be appealing because they are lower cost than a standard health insurance plan, keep in mind that the deductibles on these plans are very high so you will be paying out-of-pocket for most medical care until your deductible is met. 

This can result in significant expenses to you if you need to have routine outpatient surgery or break a bone or take medications that can be overwhelmingly expensive without prescription drug coverage, which may or may not be included in your policy.

How Much Does Major Medical Insurance Cost?

All catastrophic health insurance quotes include a high deductible, which keeps your premiums affordable. The average deductible for this type of policy is $3,989 for an individual and $7,657 for families, according the eHealth Price Index. 

Until your deductible is met, you are responsible for all medical costs not covered in your policy, so it’s important to take that into consideration when reviewing catastrophic health insurance quotes.

Catastrophic health insurance companies provide premiums as low as $30 per month and as high as $300 per month. The rate you pay will be based on several different variables, including the plan's coverage and the deductible you choose. 

Comparing plans can be time consuming, but an agent can simplify the process and provide several major medical insurance quotes that match your needs.

The "Pros" of a Major Medical Insurance Policy:

  • Emergency coverage
  • No lifetime limits
  • Preventive care coverage, as mandated by the ACA
  • Affordable premiums
  • HSAs can grow without being taxed

The "Cons" of a Major Medical Insurance Policy:

  • High deductibles
  • May not quality for HSA pairing
  • Limited coverage
  • Significant out of pockets costs

Searching for the right health insurance involves weighing your pros and cons, and also taking stock of your options. It's a good idea to start researching rate quotes for major medical insurance policies with reputable, local insurers that can provide you the services you need at a cost that makes sense for your bottom line. 

It's highly recommended that you seek out at least three rate quotes before you make a purchase and that you get all your options in front of you before you commit to a particular plan. 

Use our independent agent matching system to find the best insurance plan in your area. You tell us what you’re looking for, and our technology will recommend the best agents for your needs. Any information you give us will only be sent to the agents you pick.

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