The Catastrophic Plan: Covered California’s Cheapest Health Plan

September 30, 2013

There have been plenty of changes on the healthcare front in the past two and a half years and now the introduction of Affordable Care Act (ACA), also known as Obamacare, is close at hand. However, the new health care options, which become available on Oct. 1, have many people scratching their heads, wondering just what it all means for them and their families.

ACA aims to ensure every American has health insurance. For many, this is great news. For some, it’s concerning as they wonder, “how will I afford it?” This is the question on many people’s minds. Fortunately, Covered California has developed a fair and inexpensive plan for those looking for catastrophic health care coverage, in other words, cheap health insurance designed for emergency use.

What Do the New Healthcare Rules Mean to You?

If you already have health insurance, the short answer is probably nothing. However, even those who are already insured could save money in the new healthcare market.

If you don’t currently have insurance, chances are good that you’ll be required to have it by January 2014. Start shopping early. It’s really not much different than any other purchase: do your research and try to find the best, most affordable option that meets your needs.

Those who choose not to be insured will be assessed a penalty on their taxes. The amount will be phased in over the next three years and is expected to be 2.5% of your annual income or a set $695 fee by 2016.

What is a Catastrophic Plan?

A catastrophic medical plan provides your family with a safety net for life’s biggest emergencies. Monthly premiums are lower but deductibles are higher. In 2014, it’s estimated that the deductible for a catastrophic plan will be $6,400 for individuals and as much as $12,800 for families.

This plan is beneficial for those without serious medical conditions who are looking for the cheapest monthly premium; however, it’s only available for those under 30 or those with a financial hardship exemption.

What Does a Catastrophic Plan Cover?

A catastrophic plan must abide by the same rules as any other health insurance plan. It covers office visits, ambulatory services, emergency care, hospitalization, maternity and newborn care, pediatrics, lab services, prescription drugs, preventative care and rehabilitation services. However, the plan initially only covers three office visits per year pre-deductible. All other services will need to paid for out-of-pocket until the deductible has been met.

The Covered California Cheap Health Insurance Option

A catastrophic plan is the best option for those who qualify and are concerned about monthly premiums. The California government understands, however, that money is tight. Tax credits and federal subsidies are available on a sliding scale to help ease the burden for those who meet income guidelines. A family of four can earn in excess of $90,000 a year and still qualify for some government help. So, rest assured: even with all the changes coming, cheap health insurance is possible under Covered California.

Anything this new and complex can be confusing and health insurance is no exception. Fortunately, Terpening Insurance has spent a lot of time reading the new healthcare rulebook. Read our extensive guide to the new laws, and give us a call at 1-800-585-1776, and let us show you how catastrophic health insurance can work for your family.

Post author Loren Pleet