Is catastrophic coverage a good alternative to a more costly bronze policy?

[pb4uski]

You got it right - if the premiums for the lowest cost bronze plan exceeds 8% of your income then you are entitled to purchase catastrophic coverage.

I had a bronze plan for the first six months of 2014 because between the state and feds they had their heads up their butts on what the process should be. After a lot of complaining, including to my state and congressional representatives, my bronze plan was converted to a catastrophic plan beginning in July. The cost is about 60% of the cost of a bronze plan in my case.

In my state the process was supposed to be that you applied to the feds for a hardship exemption certificate and once you received it you could then provide that as part of applying for a cat plan. The problem was, even though the feds issued the exemption application form in December 2013, they are not processing exemption applications that they have received.

In my case, my 2013 plan was cancelled, so I used that as the reason that i could buy a cat plan.

I would start with your state exchange or healthcare.gov if your state does not have an exchange. Good luck.

One other thing. The cat plans in our state have an aggregate deductible rather than a stacked deductible but the premiums for a couple are twice the premium for a single, so were have two cat policies (one for me and one for DW) as it is a better value since the insurance kicks in earlier than if we had a policy for a couple.

 

[sengsational]

You got it right - if the premiums for the lowest cost bronze plan exceeds 8% of your income then you are entitled to purchase catastrophic coverage.
...

Thanks for the rundown.

No state exchange here, so I guess I'd start with healthcare.gov. I'll probably just call and ask to see what they say I should do.

Good point about having separate policies issued in order to avoid the deal where they ignore the individual deductible when more than one person is on the plan.

Same here on saving around 40% on premiums going to catastrophic. And the limits compared to bronze HSA plan are similar. No HSA tax advantage with cat plans, though. I read this whole thread, so saw your report of your analysis. My plan is to spend after tax money for just a few more years. When I run out and need to pull from the tax sheltered stuff (start showing income), I'll be yanked out of subsidy land, and so a new strategy will need to go into effect.

Something just occurred to me...does this only count if you don't qualify (or don't get much) subsidy? In other words, the $11K/yr premium for the cheapest bronze is the rack rate. If my income stays around 250% FPL, I'd only end-up spending $2K/yr in premiums, which would be less than 8% of my O-MAGI.

 

[pb4uski]

I found the deductibles of the cat plan just a bit worse than the bronze plan too but the 40% in premiums savings sealed the deal because our health care costs in the last 3 years has been a fraction of our deductible so the only real advantage of health insurance to us is access to providers at negotiated rates and protection against the cost of a major health event.

The 8% is the unsubsidized lowest cost bronze plan in relation to your O-MAGI income.

However, if you chose a cat plan you are not eligible for subsidies and as you note, cannot contribute to a HSA.