If your employer doesn't offer health insurance, or you simply don't want to pay for coverage you don't need, you may be a candidate for a "major medical" health plan, sometimes called a "catastrophic" plan.

Major medical health insurance is typically characterized by high deductibles and low monthly premiums. These plans typically cover only major hospital and medical expenses above a certain deductible, while you pay out of pocket for everything else, such as routine doctor visits and prescription drugs. For example, if you have a $10,000 deductible and you have surgery that costs $5,000, the cost of the surgery would come out of your own pocket, unless you've already paid $10,000 toward covered medical expenses this year.

The majority of major medical health plans cover expenses for hospital stays, surgery, intensive care, diagnostic X-rays and lab tests.

The basics

If you choose this kind of plan, your deductible will likely be $250 or higher depending on what benefits are offered in the plan. Some plans start with a deductible of $2,000 and go up to $10,000, so it depends on the range of coverage you want and the insurer.

For example, a major medical plan from Blue Cross Blue Shield of Florida for a nonsmoking 21-year-old female, with a low $250 deductible and $2,500 out-of-pocket limit after the deductible, would cost $29 per month.

Often major medical plans are sold in combination with a comprehensive health plan that covers preventive care. One can be used to cover basic health expenses such as routine doctor visits, and the other can be used to cover expensive long-term illnesses that may not be covered by the standard plan.

Also, if your major medical health plan qualifies under IRS definitions as a high-deductible health plan, you can open a health savings account (HSA), in which you can put aside money, tax-deferred, to pay for medical expenses.

Many major medical health plans have high lifetime maximum benefits, or "caps," between $1 million and $6 million. If you reach that cap, the insurance company will not pay for additional medical expenses, and your policy will terminate.

In addition, prescription drug coverage within major medical health plans often carries a separate deductible you must meet, then a co-insurance amount.

When looking at major medical plans, remember that most do not cover maternity care. If pregnancy is in your future, be sure to check coverage details. Plans that cover maternity care usually require that you wait one year after the effective date of your policy before it will be covered.

Do you fit the profile?

People who buy major medical health insurance tend to fall into two groups: young adults in their 20s and adults between age 50 to 65. Young adults who buy this coverage are often self-employed or do not have insurance through their employers.

Older adults who purchase major medical plans are primarily concerned with potential financial losses from a critical illness. Often they do not qualify for Medicare yet, so a high-deductible plan bridges the gap. These types of plans generally attract healthy people who take few prescription medications and would rather pay out of pocket for office visits in order to save on premiums.

If you have certain pre-existing conditions, you may not be eligible for a major medical health plan. Health conditions such as AIDS, diabetes, emphysema, heart disease, multiple sclerosis and schizophrenia, among others, can prevent you from buying a major medical plan.

Major medical health plans typically do not cover weight loss surgery, hormone therapy, infertility treatment, dental, vision or cosmetic surgery.

Shopping tips

Before you buy a major medical health plan, consider:

• How much is the monthly premium?
• How much is the deductible?
• How much of a deductible can you afford?
• How extensive do you want your coverage to be?
• Do you need prescription medications?
• Can you afford to pay for your own doctor's office visits?
• Do you have any pre-existing conditions?
• Do you get sick often?
• Do you plan to become pregnant?
• What is the lifetime annual maximum?