Health insurance young people can buy AFTER they get sick

American Community Mutual Insurance has created a new health insurance plan aimed at 19 to 34 year-olds, who tend to be healthy but can be hit by high health costs if they lack catastrophic coverage. The limited-benefit plan costs less than $100 a month and caps benefits at between $1,000 and $5,000 a year. But when someone buys into the basic plan, they have the option to buy a larger insurance plan if they get extremely sick. In that case, they’d pay a lump sum of about $10,000 and get a plan with a benefit cap of $5 million. (Source: "New Insurance Plan Has Novel Pitch--Get Sick, Buy More" Wall Street Journal, Sept. 14, 2007, reprinted at Healthdecisions.org.)

As stated in this useful analysis on the WSJ blog, the new plan "combines limited forms of insurance that some have been turning to as fat, employer-sponsored health-care plans become harder to come by: mini-medical plans, which offer only limited coverage, and catastrophic insurance, which doesn’t offer much in the way of basic care but might keep you out of bankruptcy if you get really sick." The company will initially release the plan in Texas and hopes to introduce it in a dozen other states over the next year.