Hospitalization Only Insurance vs. Catastrophic Insurance

Some strategies for finding affordable health insurance.

I've been a health insurance agent since 1985. I help Connecticut residents find health insurance and have for the last several years have also managed a website that helps people in other states find private medical and hospital policies online.

Over the years I have changed my mind about hospitalization only insurance. These health insurance policies have significant limitations that are not found in the typical health insurance plan. I tend now to help my clients who express an interest in hospital only policies find catastrophic health insurance providers. High deductible or catastrophic medical insurance policies are also low in cost, but have fewer drawbacks.

Why I don't like hospitalization only insurance:

1. Hospital stays are getting shorter and shorter. However, people are not necessarily healing any more quickly. The medical care that years ago, you might have received in the hospital during the last day or two of your stay is today care that you are likely to receive outside of the hospital. This care is not likely to be covered. A hospitalization only health insurance plan may cover the hospital stay, usually not the medical care that takes place outside of the hospital.
2. X-rays, lab work, MRIs, etc. often take place outside of a hospital. These can be expensive and may not be covered by a hospitalization only insurance policy.
3. A long-term illness may require years of doctors visits, none of which are likely to be covered by a hospitalization only insurance policy. 

People buy hospitalization only insurance policies to save money. Saving money is of course a good thing. However if it was the only thing we'd all buy the least expensive car and wear the least expensive clothes.

If you need to keep your costs for health insurance lower, I recommend searching for medical and hospital policies online or elsewhere and looking for a catastrophic or high deductible policy that covers you both in the doctor's office and in the hospital. In my opinion, a catastrophic health insurance policy that has a $2,000 deductible, but covers you in the doctor's office and the hospital is a better deal than a hospitalization only policy that has a $1,000 deductible even if they cost the same. 

Hospitalization only insurance is like a bullet-proof vest that is only bullet-proof in the front. Catastrophic health insurance may be a better option. If you need to save money, consider a higher deductible medical insurance policy that is "bullet-proof" on both sides.

Good Luck,

Alston J. Balkcom

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