They look so innocent on the website – and so cheap! But they aren’t a good fit for everyone – here’s why.
Number 1: I’m 29!
The catastrophic plans are only available to young adults – 29 and under – and in certain hardship cases. Most people won’t qualify for a catastrophic plan – but they can be a good fit for the under 29 crowd making a better than average living.
Number 2: What Tax Credit?
The Advance Premium Tax Credit only applies to Metal Tier plans – not to the catastrophic. If you skipped the tax credit part of the plan finder tool, go back and put in your income information. You may find that the catastrophic that looked to be the cheapest option available isn’t the least expensive – if you have a tax credit! You may be able to afford better coverage by applying for a tax credit.
If you aren’t eligible for the tax credit, then the catastrophic plans are usually the least expensive.
Number 3: Why am I Paying for Everything if I have Insurance?
Catastrophic plans exist solely to keep you out of bankruptcy if something really expensive comes along. Originally, that was all they did – but some of the newer ones have a couple copay doctor visits built in. It’s a nice feature – if you have it.
Otherwise, your maximum out of pocket is equal to your deductible and nothing pays before deductible. Translation: if you get sick enough to meet your deductible, you’ve also met your maximum out of pocket and the insurance company pays 100% thereafter. If not, you’re paying for your own visit to the ER for the sprained ankle, all your medication for the stomach bug you caught – but you may only pay $50 each for your two doctor’s office visits – assuming your plan has those copays.