What Is the Difference Between Major Medical and Non-Major Medical Insurance?

There are substantial differences between major medical and non-major or basic medical insurance. The consumer must be sure to know the benefits offered by each in order to make an educated decision on which type of insurance to purchase.

Similarities

• Both major and non-major plans cover hospitalization expenses.

Differences

• Non-major or basic medical insurance is usually a first-dollar type of coverage. It pays hospitalization expenses from the start, but has limits on how much it will pay per procedure or service. A major medical plan pays after deductibles are met, but has much higher limits on how much it will pay. Common lifetime limits are $1 million or $2 million. Some policies have no lifetime limits. Major medical usually pays 70 or 80 percent of the costs after deductibles are paid.

Coverage

• Major medical insurance commonly covers physician and surgeon fees, blood and oxygen costs and the cost of prosthetic devices. Non-major medical plans commonly cover the charges for the room, nurses, X-rays, medications and other supplies and services. Coverage varies depending on the policy purchased.

Premiums

• Premiums are generally lower for major medical than non-major medical due to the deductibles and co-pays that must be paid by the insured.

Comprehensive Plans

• There are medical insurance plans that combine major and non-major medical coverage. These comprehensive plans provide the best coverage for expenses associated with hospitalization and lengthy recovery.