In recent years, one type of health insurance that has become very popular among young professionals is the catastrophic or major medical insurance plan. This is because this kind of insurance plan is very appealing to young people because it is very affordable and it can provide them significant protection during any major medical problems that they may face in the future. However, although this kind of plan can be very appealing, people who are thinking of getting this kind of health insurance plan should still weigh the pros and cons in getting such a plan. This is because doing so can help them make the right decision with regard to the insurance plan that they need. To effectively do so, a person then needs to know the advantages and disadvantages in getting this kind of plan, which can help him assess on whether getting such a plan is a risk worth taking.

Advantages and disadvantages of catastrophic insurance plans

One of the biggest advantages in getting a catastrophic medical insurance plan is that it is very affordable. This is because in some cases, a young and healthy individual can pay as low as $30 a month in premium payments. Another advantage is these plans can provide people significant protection in times of major medical problems, as the plan can pay for a substantial amount of the total medical expenses. This is because the plan is deductible-based, the insurance company will pay for the total amount, minus the stated deductible.

However, the deductible nature of the plan can also be a disadvantage because this kind of insurance plan becomes more affordable when the deductible amount increases. This means that in times of major medical problems, plan holders still need to pay a significant amount of money to cover the medical bills. In addition to this, the fact that this kind of insurance plan only covers major medical problems, young people who develop a condition that requires routine medical check ups cannot get any money from this kind of plan.

When deciding to get health insurance, one of the most important steps in arriving at a decision is to carefully weigh the pros and cons of each type of insurance plan. This is because calculating the risks involved in getting an insurance plan can help people assess whether the insurance plan is a risk worth taking. With regard to getting a catastrophic or major medical insurance plans, this is also very true, as carefully weighing the advantages and the disadvantages of getting one can help people decide on which plan is the best insurance plan for them.

Never judge your private health insurance policy by its cover. Since private insurance plans differ vastly in the benefits they provide based on cost, policy holder need, and individual insurers, make sure the benefits your policy offers are the right benefits for you.

It should seem obvious that a young person in their 20′s is going to have different medical insurance needs than his 55-year-old parents, and that his parents are going to have different coverage needs than their 75-year-old parents.

Yet all too often, Australians purchase or hang on to policies that they may have outgrown, or that may not be geared to their life stage, lifestyle and health issues. In turn, they may be either over-paying or under insured.

Comparing health insurance policies based on life stage is important in selecting the best coverage for your individual needs. For instance, parents with adult dependent children can carry coverage for them up to the age of 25, and can drop obstetrics coverage once they know that they won’t be having any more children.

When comparing plans, make sure your needs are being identified by first considering which of the five general life stages you and your family fits into, and plan accordingly. Generally, these five stages include:

Singles – For young, healthy individuals, your health insurance should probably be geared toward emergencies such as injuries caused in an accident. If you become ill, your plan would need to cover ongoing treatments. You may need optical or dental coverage; selecting the right insurance coverage is a matter of comparing health policies and determining the level of coverage you want that fits your budget.

If you’re a 20- or 30-something single, you probably won’t need hip replacement surgery any time soon, but you should probably make sure you’re covered for reproductive health issues if they arise, or treatment for sports injuries if you’re active.

Young couples – Couples who have not yet started a family may compare health policies that include obstetrics and fertility treatments. Additionally, young couples sometimes face short-term or long-term illness of a partner. Your health insurance can provide financial security and the comprehensive level of care and treatment you will need if the unexpected happens.

Families – Whether you’re planning to start a family, planning on having more children, or dealing with an illness or injury of a family member, your health insurance should provide the coverage you need to ease the financial crunch that medical costs can create. Choosing the best insurance plan for your family means taking into consideration the cost of hospital care, the physician or specialists that may be needed, and even after care. If yours is a young family with children aged infant to teen, it’s important to have coverage that includes dental and orthodontic treatments.

Empty-nesters – This group can include individuals between the ages of 40 and 60, facing an increased risk of problems that are common as we get older. Heart disease, knee and hip replacements, elevated blood pressure, arthritis and other medical conditions begin to appear as we age. Your health insurance policy that has served you for years may no longer be suited to your lifestyle and needs. Review your existing coverage, and compare it to other health plans to make sure you’re not paying for services you no longer need, and that you are protected for those health issues that begin popping up after 40.

Retirees – Australians 65 and over should consider keeping their private health coverage, since the government offers a 35 percent rebate on private coverage premiums; for individuals 70 and over, that rebate is increased to 40 percent.

Retirees who opt out of health coverage have up to three years to pick it back up; if it is not picked up within three years, your premium will cost an additional two percent for every year you are over 30.

Purchasing private health insurance can be confusing and expensive. The more comprehensive the coverage you choose, the more expensive it can get. Shop around and compare health insurance policies and premiums carefully before you buy. By thoroughly comparison shopping, you can cut as much as 30 percent off your health insurance premium.

Most people prefer to stay without any kind of coverage than going for an individual plan as the later is costlier policy to buy.

WHEN TO GO FOR AN INDIVIDUAL PLAN?
Individual plans are not generally preferred by people as they are not cost effective. However if a person is self employed, or his family insurance does not cover him or if he is between jobs, then the only alternative that he has is to go for an individual medical plan.

TYPES OF INDIVIDUAL PLANS
While a person in such a situation has no other option, but to go for an individual plan, the choice lies in the kind of plan he opts for. There are various medical plans that are not too heavy on the pocket. Here is a look at the few of them.

- Preferred Provider Organization: This is the most popular individual plan. Though there is a network of healthcare providers, one can opt for a doctor outside the network as well. In a case of emergency, the beneficiary may not even have to pay extra for consulting a doctor outside the network.

- Health Maintenance Organization: It is a basic individual plan and is the best option when one has financial constraint. The plan focuses on providing primary and preventive treatment.

- Indemnity plan: It provides insurance based on deductibles and upto the maximum allowed for that policy.

QUESTIONS TO BE ANSWERED
When looking to buy one of the costliest type of medical plan, it is important that you are satisfied that it provides you with exactly the kind of coverage that you are looking. A quick checklist on the following and you can be assured of the coverage.

- Is your choice of doctor included in the provided network?
- Will it cover your medical expenses outside your state?
- Will your existing medical condition affect your coverage?
- What will be the deductible, premium and the co-insurance that I am supposed to pay?
- What are the benefits specific to the plan I am opting for?

TIPS TO GET YOUR INDIVIDUAL PLAN CHEAP
Agreed that individual plans are expensive, but that does not mean there is no way around. If you study carefully, then you will surely come across plans that are comparatively cheaper.

Agreeing to pay a higher deductible automatically means that you are paying a lesser premium. So if you looking for a plan that hopefully you will never use, then this is a good permutation to look for.

One can also lower the premium by excluding certain health services in the plan. For example, if you have no plans of motherhood at the moment, then why pay more for maternity benefits in your medical plans.

However, the sure shot way getting a plan at a cheaper rate is to purchase it as soon as possible. Premium depends on the medical status and age of the person which basically means the older you get, the more premium you have to pay. Hence the idea is to buy your individual plan now so that you don’t have to pay more for it later on.

INDIVIDUAL PLANS AFTER THE REFORMS
There is a common misconception that one has to pay more after the reforms are implemented. But in fact, premiums could go down by 14 to 20 % after the Act is implemented. And with the tax credits being available to the residents, individual premiums could depreciate further by about 60%. Individuals do not have to pay more for co-pays and deductibles either as there would be a cap on how much one pays from his pocket.

Individual plans will also come with a bouquet of other essential benefits. This will include prevention and wellness benefits at no extra charge, recommended vaccination and an access to the state-based Exchange. They will also allow people to choose their own doctor from the participating providers. Also there would be no prior authorization required to visit an ob-gyn.

Buying an individual medical plan can be tough no doubt, but with a cautious approach and the right research, one will be able to grab a really good deal for himself.