Should you buy catastrophic health insurance? – Part 1

The answer depends on who you are.

Thanks genius, real helpful advice.

But wait, before you click the “Back” button on your browser, take a moment to recognize that buying or not buying catastrophic health coverage could be one of the most important financial decisions you ever make. Ask yourself, if I were to have a heart attack, or blow out a knee playing pick-up basketball, or if I were to get in a wreck on the way to the supermarket, how would I pay for the $30,000+ in medical care needed to make me better? Would you lose your home? Your savings? Maybe have to declare bankruptcy?

Catastrophic (or “major medical”) health coverage is designed to protect you and your family’s financial future should something terrible happen. But whether you should plunk down the premium needed to buy this coverage, really does depend on who you are.

So who should not buy catastrophic health coverage?

At the risk of losing a few readers, I will start by identifying people who should not buy catastrophic health coverage:

First, let’s cross off people who already have health insurance through their employer or the government. If you fall into this group, congratulations! There are more than 46 million of us who do not. That’s right, the most recent estimates show that more than 46 million Americans have no health coverage whatsoever . . . none.

Second, if you have some awful preexisting condition, like cancer, HIV, diabetes, heart disease, MS, etc., forget about catastrophic health coverage. Most plans specifically exclude coverage for care relating to these preexisting conditions. Your best bet is to find a reputable insurance agent who can help identify the least costly coverage options.

Third, if you a woman planning on having a child during the next few years, catastrophic health insurance probably is not for you. Virtually all catastrophic plans exclude coverage for maternity care.

Who should buy cat strophic health coverage?

Healthy people in their 20s or between the ages of 50-65 (i.e. before Medicare kicks in) are, by far, the most common groups who buy catastrophic health coverage. Why?

Because catastrophic health plans generally have high deductibles and low monthly premiums, they appeal to people who are healthy, and don’t want to pay for coverage they don’t need, or those who are just trying to bridge the gap before they are eligible for Medicare and either can’t afford or don’t want to pay for a more expensive