- Catastrophic health insurance limits sometimes apply to each individual illness or injury. For example, Someone with lung cancer would only have to pay $50,000 for treatment before insurance paid. If that person had medical bills for a different condition, they would have to pay a separate $50,000 before insurance paid the rest at 100 percent.
- Some catastrophic health insurance plans use family caps. Instead of basing the catastrophic limit on specific illnesses or injuries, each family only pays a limited amount for health care. Once the entire family, for example, pays $50,000 together for health care, the insurance pays 100 percent of the rest.
- Many catastrophic health insurance plans and limits accompany medical savings accounts (MSA), according to the Bureau of Labor Statistics. These accounts accumulate pre-tax money for health-related expenses. Funds unused at the end of the year carry over to the next year. They help ease the pain of high catastrophic limits by allowing employer and individual contributions.
- Some catastrophic health insurance plans accompanying MSA plans do pay for preventative health care services. Sometimes the insurance company pays for regular physical exams and preventative lab work without taking the catastrophic limit into consideration, states the website MSA Info. Other doctor visits, however, remain the plan holder's responsibility until they reach the cap.
- Most people think of catastrophic limits in relation to health insurance. Other types of insurance, however, use the same principle. Homeowners insurance dealing with natural disasters often carries catastrophic limits for landslides, earthquakes and floods if the homeowner chooses. This can come from a completely separate company than the homeowner's insurance or as an addition onto a standard policy.
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