Major medical health insurance policies typically feature lengthy terms and comprehensive coverage. Their premium costs tend to be more costly than short-term plans that qualify as minimum essential coverage under the ACA.
Thankfully, the Affordable Care Act (ACA) has helped moderate some of the volatility associated with premium costs for comprehensive plans; but many factors should be taken into account when determining whether major medical health insurance meets both your budget and healthcare needs.
Cost
Health insurance may not be cheap, but it can help ease your expenses if you face major medical bills or need care due to an accident or illness. When looking at total cost, factors that determine total costs include monthly premiums plus any deductibles, copayment and coinsurance amounts as well as plan options and services you use – these details are listed on a health plan’s Summary of Benefits and Coverage document.
Major medical coverage can be obtained through either an employer-provided group plan or individual policy, state and federal marketplaces (also called exchanges) created by the Affordable Care Act (ACA, also referred to as Obamacare), as well as through individual health plans sold directly from providers that make cost and benefit comparison easier, including some plans with tax credits that reduce premium costs and out-of-pocket expenses.
Compare major medical coverage with basic health insurance plans which reimburse some medical costs after meeting payment thresholds, major medical plans often have higher monthly premiums and require you to cover out-of-pocket expenses before the plan kicks in. On the plus side, they often cover more types of care such as hospital stays or complex surgeries and provide safety net protection in cases of catastrophic costs like this.
Major medical health plans must provide the minimum essential benefits required by the Affordable Care Act and offer minimum value. While most major medical plans are fairly comprehensive, some large employers have taken to offering minimal (mini-med) coverage which does not meet this criterion and therefore does not count as major medical coverage.
Costing of major medical health insurance plans varies based on various factors, including type and age. Preferred Provider Organization (PPO) plans and platinum plans available through marketplace tend to have higher premium rates; while this might seem costly at first, their lower deductibles and out-of-pocket maximums often compensate.
Coverage
Major medical health insurance provides extensive protection for a range of health needs. It covers things such as prescription drugs, visits to the doctor, hospital stays and surgeries – although not covering cosmetic procedures specifically. While major medical health insurance doesn’t cover cosmetic procedures specifically, it provides financial security against unexpectedly costly health care expenses.
To qualify as major medical insurance, plans must meet certain coverage criteria set by the Affordable Care Act (ACA), commonly referred to as Obamacare. This includes promising to cover most of the 20 most costly conditions such as heart attacks, strokes and respiratory diseases like pneumonia as well as limit out-of-pocket costs to no more than a certain percentage of total annual health spending by policyholders. Most employer sponsored plans as well as plans available through healthcare exchanges qualify as major medical coverage.
Other types of insurance not considered major medical coverage are limited benefit plans, fixed indemnity insurance policies, dental/vision coverage plans, health care sharing ministry plans and critical illness coverage policies. These are intended as supplements rather than primary coverage; moreover they do not qualify as minimum essential coverage under ACA and therefore cannot take advantage of premium subsidies during open or special enrollment periods.
Simply stated, major medical insurance is what most people envision when they think of “real” health insurance. It covers most common healthcare costs and may prevent financial ruin in case of illness or injury.
Although some individuals opt for lower-cost alternatives instead of major medical coverage, those without employer-sponsored health insurance or who do not qualify should take serious consideration when making this choice. Even if savings exist to cover emergencies, having major medical coverage could help stave off financial disaster should their health take an unexpected turn for the worse. Moreover, people with preexisting conditions do not risk being denied coverage or charged higher premiums when purchasing major medical plans.
Pre-Existing Conditions
Major medical health insurance provides comprehensive coverage for most healthcare needs, from hospitalizations and surgical procedures to physician office visits and durable medical equipment expenses such as speech therapy or physical or occupational therapy treatments – even mental health services! Furthermore, comprehensive plans often offer preventive care coverage such as screenings for cancer or high blood pressure screenings.
The Affordable Care Act (ACA), commonly referred to as Obamacare, made it illegal for major medical plans compliant with ACA to deny individuals coverage for pre-existing conditions or charge higher premiums based on any history of certain diseases or injuries. This has made obtaining healthcare much simpler, and allowed people to change jobs or switch insurers without worrying if their new plan will cover existing conditions(s).
However, not all plans that labeled as Major Medical are necessarily comprehensive in their coverage. Short term plans that operate similarly to policies sold prior to ACA’s implementation and available in certain states are often considered by state regulators to be “major medical” coverage despite never having been regulated as such by federal authorities. Such “skinny plans” do not technically meet minimum essential coverage standards, therefore large employers cannot use them as an avenue to avoid employer mandate penalties when offering these plans.
Substantively, all new individual and family Major Medical policies sold since January 1, 2014 must cover the 10 essential health benefits outlined by the Affordable Care Act without annual or lifetime benefit caps, making comprehensive plans more accessible. This has made comprehensive plans more readily accessible to those who may otherwise struggle to afford them.
However, if your goal is not avoiding employer mandate penalties or receiving Marketplace subsidies for healthcare costs, then more modest and cost-cutting plans that only provide minimal essential coverage may be more suitable for you. Such plans are known as skinny or “mini-med” policies and typically cover only some of the core 10 essential benefits such as hospitalizations, emergency room visits and some prescription drugs.
Exclusions
Before the Affordable Care Act was implemented, major medical health insurance plans often excluded coverage for preexisting conditions or charged higher premiums based on an enrollee’s health history. Though less prevalent now, such exclusions and underwriting rates still exist; for example if Lori broke her arm in a snowboarding accident as a teen and later tried to obtain individual marketplace coverage her insurer might exclude coverage or increase premiums because of his prior hypertension diagnosis.
Now, all major medical health plans must meet ACA-compliant and guarantee issue requirements to qualify for premium subsidies. However, some employers continue to offer plans that do not comply with ACA regulations, such as their deductible or out-of-pocket limit requirements – these types of plans do not count as major medical coverage and therefore do not qualify.
Comprehensive major medical health insurance policies cover an extensive variety of health services, from hospitalizations and surgeries to prescription drug coverage and wellness visits. Many major medical policies also offer additional coverage such as dental, vision or special programs designed to manage specific health needs – for instance diabetes care management programs.
Comprehensive major medical plans tend to be more costly than other options due to the comprehensive coverage they provide; however, the Affordable Care Act’s premium tax credits make these plans more accessible for many consumers based on income and location considerations. Eligibility depends on both variables.
The Affordable Care Act mandates that major medical health insurance plans cover at least 10 key healthcare services, from illnesses and injuries to preventive services such as vaccinations, screenings, and annual wellness exams.
The Affordable Care Act defines “major medical health insurance plan” as plans that cover at least 60% of the average costs associated with health care in your region, or, at minimum, at least 80%. Furthermore, major medical health plans must have both deductibles and maximum out-of-pocket limits that limit how much out-of-network healthcare you must pay each year.
