Should you get a catastrophic plan i.e., a high deductible or hospital only coverage?
A "catastrophic" plan generally means that you pay all covered expenses until you have paid an amount equal to a high annual deductible. So there are no copays, i.e., where you can make a one time small payment for each medical service and insurance pays the rest.
There can be a difference between what various "catastrophic" plans cover. Some may be comprehensive in what they pay after the deductible is met, i.e., after deductible they cover most items that may be medically necessary. Prescriptions may or may not be covered.
Others may have a "hospital-surgical" design, meaning that the only items that are covered are inpatient hospital expenses and surgery whether it is inpatient or outpatient. Emergency room treatment may or may not be included in coverage.
This is an important consideration because some outpatient medical expenses can be high, e.g., if extensive testing is needed, or extended periods of various therapies, or chemotherapy for cancer. Some brand name prescriptions can also be very expensive.
If there is little outpatient coverage, the premium may be significantly less, but you need to understand what is not covered.
For the same premium, it would be financially safer to get a comprehensive catastrophic plan than a hospital-surgical.
When selecting the maximum out-of-pocket amount, consider the fact that some medical conditions that are very expensive to treat are also chronic. So if you developed a chronic, expensive condition, you would have to pay the out-of-pocket amount every year.
HSA-qualified Advantage?
Unless the plan design meets the requirements of the Internal Revenue Code to entitle you to open a Health Savings Account, the tax deductiblity of your out-of-pocket payments is limited to itemizing under Schedule A of your tax return. The first 7.5% of Adjusted Gross Income is not deductible.
The HSA tax deduction does not have any 7.5% factor.
To qualify for an HSA, the deductible and maximum out-of-pocket limit must be within a certain range.
If you wanted an out-of-pocket limit higher than the HSA limits, then it is a matter of whether an HSA is more or less important than the difference in premium for the different out-of-pocket amounts.
Comparing Catastrophic Plans
Under "Limit Plans By" at the top of the list of quotes, go to the 'Copay' heading and select 'N/A'.
Then only plans without copays will be listed. The higher deductible plans will be listed first because the plans are listed from lowest premium to highest.
You can also select a particular deductible and coinsurance combination using the "Deductible' and 'Coinsurance' boxes, or select one insurance company at a time using the 'Carrier' box on the right side.
To compare plans side by side, check the box on the left side of the quotes to compare and then click on 'Compare' at the top of the list.
More information on the plan design is found under "Plan Details" at the bottom right side of any quote result box.
A deductible is an amount that is the total of all expenses that you pay per year before the plan starts to pay for any expenses.
Coinsurance is the percentage or amount that you pay after you have paid the deductible amount that year. Coinsurance could be greater than the deductible or it could be zero, depending on which plan you buy.
Don't judge a plan's cost-effectiveness by the deductible alone. Add deductible to coinsurance for the total possible out-of-pocket per year, then compare.
Select High Deductible Plans (most states)
(if your state is not included, go here and select a high deductible range)