6. Make sure catastrophic plans cover more than just hospital stays. Many people know that hospitalization is expensive but underestimate how much costly care is delivered on an outpatient basis these days, Metcalf said. "There are a lot of diseases that can be ridiculously expensive where you're not in the hospital at all. If you only have inpatient coverage you're broke."
7. Look for an annual out-of-pocket limit and ask what it includes. Sometimes the annual limit on out-of-pocket expenses includes the deductible and sometimes it doesn't. Same thing for co-payments, co-insurance and even prescription drug costs.
8. Avoid nonrenewable, short-term policies unless you have no other choice and are certain you will have job-based coverage lined up when it ends. Temporary policies may make sense as a less expensive alternative to Cobra for young people such as teachers who are a few months away from starting a job with benefits or who can't continue on a parent's health plan, said Steve Pollack, Indianapolis-based president of Golden Rule Insurance Company, a unit of United Healthcare that sells short-term policies in 34 states. But both Metcalf and Pollitz strongly recommended against this option because the coverage will be canceled at the end of the term no matter how badly you may need it then. "The reason these short-term policies are cheaper is they know worst-case scenario they only have to cover you for a couple months and then you're dumped," Pollitz said. Amir Mostafaie, consumer health insurance expert for Ehealthinsurance in Gold River, Calif., said some short-term policies don't cover prescription drugs. "We almost always find standard individual plans to be a better option in most situations," he said.
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