Catastrophic Health Insurance in Massachusetts
If you are a resident looking for affordable health insurance in Massachusetts, Catastrophic health insurance may be a good option for you for the short term or as a supplement to your present insurance.
Catastrophic health insurance is often referred to as a high deductible health insurance (HDHP) and major medical insurance policy. High deductible plans have become more popular in Massachusetts because of the lower costs as compared to traditional plans.
Massachusetts is a Leader in Health Care Reform
Massachusetts has the highest level of health care coverage in the country with more than 98 percent of its residents having health insurance.
The Massachusetts Health Care Reform Law of 2006,requires all adult residents age 18 and older to have health insurance if they can afford it. Adult residents without health insurance face a tax penalty. To meet the state’s requirements, the insurance must have Minimum Creditable Coverage (MCC). Some choices with (MCC) include: PPOs, HMOs, and qualified high deductible health plans (HDHP).
What is a High Deductible Health Insurance Plan?
A deductible is the amount of money a person must pay out of pocket before the insurance company begins paying on a claim. High-deductible plans typically require consumers to pay $1,000 or more per person up front for health care, in exchange for lower monthly premiums. Premiums are the amount charged by the insurance company to insure you.
As of 2010, HDHPs have plans with a minimum deductible of $1,200 per year for self-only coverage and $2,400 for self-and-family coverage. The maximum amount out-of-pocket limit for HDHPs is $5,950 for self-only coverage and $11,900 for self-and-family coverage.
Most HDHPS require that policy holders to pay for routine and preventative office visits and prescriptions, until the deductible has been met. In the event of an accident or serious illness, your HDHP policy will pay for costs above and beyond the deductible. Your insurance company pays the hospital bills and can save you from financial ruin, hence, the term catastrophic came about.
Health Savings Accounts (HSA)
If you’re in Massachusetts consider getting a high deductible health plan (HDHP) coupled with an HSA. A HSA is a tax exempt savings account designed to help pay for medical costs only. The money in your HSAs can be used for routine and out of pocket medical expenses. All contributions, capital gains, and withdrawals are not taxed. Accounts may be in banks, insurance companies, IRS approved IRAs or Medical Savings Accounts. Anything you don’t spend one year carries over to the next year.For calendar year 2012, the contribution limit is $3,150 for an individual plan or $6,250 for a family plan.
When choosing between a catastrophic insurance plan and comprehensive health insurance, remember that comprehensive health insurance costs more but offers greater coverage for you and your family. Catastrophic health insurance plans are much cheaper over the long run and require high out-of-pocket expenses to open one. If you have an ongoing medical condition that requires frequent attention, choose comprehensive insurance. If you are generally healthy but want a safety net, choose catastrophic insurance.
Catastrophic insurance or a HDHP makes sense for a lot of people. Compare the various plans and costs available to you. Talk to insurance agents.
One of the best ways to compare costs of the plan you are seeking is to get competitive quotes online. With one simple click you can get up to 5 quotes and you are under no obligation to buy.