Healthcare
Major Medical
Major medical health insurance in layman’s terms is what people would generally consider “real” health insurance. It does not include limited benefit plans, fixed indemnity plans, dental/vision plans, accident supplements, or critical illness plans.
Major medical plans usually have a set amount, or deductible, which the patient is responsible for paying. Once that deductible is paid, the plan typically covers most of the remaining cost of care, subject to co-insurance paid by the patient. Many major plans also have co-pays for some services.
Most major medical plans will also cap your out-of-pocket exposure for in-network services. In 2018, all ACA-compliant plans must cap in-network out-of-pocket costs (for essential health benefits) at no more than $7,350 for an individual and $14,700 for a family. In 2019, the upper limit on out-of-pocket costs increased to $7,900 for an individual and $15,800 for a family.
Short Term Medical
Short-term health insurance plans are the closest thing to Major Medical Health Insurance. They’re similar in many ways to the grandfathered and grand-mothered major medical plans that were sold before the ACA was enacted and implemented, and they’re still available for sale today (unlike grandfathered and grand-mothered plans, which have not been sold since 2010 and 2013, respectively). The Trump Administration has recently relaxed the rules for short-term plans; as of October 2018, short-term plans can have initial terms of up to 364 days, and total duration, including renewals, of up to 36 months.
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Fixed Indemnity
Fixed indemnity health insurance is a type of medical insurance that pays a pre-determined amount on a per-period or per-incident basis for specific illnesses or injuries covered by your policy, regardless of the total charges incurred.
Under an Indemnity plan, you may see whatever doctors or specialists you like, with no referrals required. Though you may choose to get the majority of your basic care from a single doctor, your insurance company will not require you to choose a primary care physician. An Indemnity plan may also require that you pay up front for services and then submit a claim to the insurance company for reimbursement.
You’ll likely be required to pay an annual deductible before the insurance company begins to pay on your claims. Once your deductible has been met, the insurance company will typically pay your claims at a set percentage of the “usual, customary and reasonable (UCR) rate” for the service. The UCR rate is the amount that healthcare providers in your area typically charge for any given service.
An Indemnity plan may be right for you if:
- You’re looking for the greatest level of freedom possible in choosing which doctors or hospitals to visit
- You don’t want to designate primary care physicians or get referrals to get specialists
- You want to freely visit any physician you choose