Major Medical Benefits of Health Insurance

Health insurance plans available on the market today offer options with a variety of packages of covered services, along with choices among deductibles, premiums and lifetime caps. One choice available, which may be suitable for some individuals, is a major medical health insurance policy. To assess if this type of policy fits your individual needs, you will need to understand the benefits, as well as the limitations.

Buyers

• According to Insure.com, most people who purchase major medical health insurance without additional coverage are among two age groups: adults in their early 20s and adults between the ages of 50 to 65. Major medical health insurance policies are also known as catastrophic health insurance and may be referred to as high-deductible plans, as this type of insurance is historically known for high lifetime coverage ceilings, high deductibles and lower premiums.

Hospitalization Benefits

• Major medical polices generally cover the costs of hospitalization including charges incurred for diagnostic tests, lab work and surgeries. Physicians' fees for services rendered while the policy holder is hospitalized are also generally covered under major medical health insurance. Some major medical policies may cover physicians' fees outside of a hospital setting, others may not. Many major medical policies do not cover pregnancy, therefore, are generally not the right choice for young families but may suit well the needs of a young single adult.

Prescription Drugs

• The cost of prescription drugs may not be covered under a major medical policy, or if prescription drug coverage is part of the plan, it may carry a different deductible, as well as require co-insurance, or co-payment. For example, a major medical plan may carry a $10,000 deductible for hospitalization and a $500 deductible for prescription drugs, plus a $10 co-pay on drugs, all of which the policy holder may be responsible for paying prior to the insurance footing the bills.

Financial Protection

• One of the most significant benefits of major medical insurance is to prevent the policy holder, insured, from suffering catastrophic financial loss as the result of an acute and unexpected illness that requires costly treatments or an extended hospital stay. Another major benefit is the lower premiums generally required for major medical health insurance. Lower premiums mean you can expect to pay larger out-of-pocket amounts. However, the expense over time may be more readily affordable for healthy people.

Major Medical in a PPO

• According to the Texas Department of Insurance, some preferred provider organization, PPO, plans may be major medical policies. A PPO health insurance plan offers participants a network of doctors and hospitals to choose from, but the policy holders are not limited to purchasing services only from network participants; however, services may cost more outside of the network.