Alyssa Lane
Major medical insurance is a term used to describe comprehensive health insurance that covers a wide range of healthcare expenses, including emergency room visits, preventive health services, surgical procedures, doctor visits, and prescription medications. It is often referred to as real health insurance and is essential for nearly everyone. Major medical insurance can be obtained through an employer, the government (Medicare and Medicaid), or as a self-purchased plan. The cost of major medical insurance varies depending on factors such as age, location, and health status, but it typically involves regular premium payments and a deductible, which is the amount paid out-of-pocket before insurance coverage begins. Understanding the costs and benefits of major medical insurance is crucial for managing healthcare budgets and ensuring access to necessary medical care.
| Characteristics | Values |
|---|---|
| Definition | Comprehensive health insurance that provides a solid safety net in the event of a serious illness or injury |
| Coverage | Preventive care, doctor visits, hospitalizations, surgeries, medications, mental health therapy, emergency room visits, urgent care visits, and other routine medical expenses |
| Exclusions | Cosmetic procedures, limited benefit plans, fixed indemnity plans, dental/vision plans, accident supplements, health care sharing ministry plans, or critical illness plans |
| Sources | Employer, government (Medicare and Medicaid), or self-purchased plan |
| Cost components | Premiums, deductibles, coinsurance, copays, and out-of-pocket costs |
| Premium determinants | Age, location, tobacco use, and level of coverage |
| Average monthly cost | $635 for an ACA health insurance marketplace plan; $543 for a Bronze plan; $660 for a Silver plan; $708 for a Gold plan; $440 for individual coverage; $1,168 for family coverage |
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What You'll Learn
What is major medical insurance?
Major medical insurance is comprehensive health insurance that covers a wide range of healthcare expenses, including emergency room visits, preventive health services, surgical procedures, doctor visits, and prescription medications. It is often referred to as "real" health insurance and is designed to provide a financial safety net in the event of a serious illness or injury.
Major medical insurance plans typically have a set amount, known as a deductible, that the patient is responsible for paying before the insurance company covers its share of the costs. Some services, such as office visits and prescriptions, may be covered with a copay even before the patient has met their deductible. Once the patient's deductible is met, the insurance plan usually covers most of the remaining costs of care for the rest of the plan year.
The cost of major medical insurance premiums can vary depending on factors such as age, location, health status, and lifestyle choices. For example, older individuals may face higher rates due to increased health risks associated with aging. Additionally, individuals with pre-existing conditions or chronic health issues may have higher premiums to reflect the anticipated higher healthcare costs.
Major medical insurance can be obtained through an employer, the government (Medicare and Medicaid), or by purchasing a plan directly from a health insurance company. It is considered essential coverage, providing peace of mind and protecting one's health and finances in the event of a serious medical condition.
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How much does it cost?
The cost of major medical insurance can vary depending on several factors. Firstly, it is important to understand the different cost components involved in major medical insurance. These typically include premiums, deductibles, copayments, and coinsurance.
Premiums are the regular payments made to keep your insurance active, usually paid monthly. The amount can vary based on factors such as age, location, tobacco use, and the level of coverage chosen. Age plays a significant role, with older individuals generally facing higher rates due to increased health risks. However, in states like New York and Vermont, age does not impact premium costs. The average premium for individual coverage was $440 per month during the 2018 Obamacare nationwide open enrollment period.
Deductibles are the amount you pay out-of-pocket for healthcare services before your insurance starts covering its share of the costs. Plans with higher deductibles usually have lower monthly premiums, but you will pay more upfront for your medical care. The average deductible for a major medical insurance policy is $3,989 for an individual and $7,657 for families, according to the eHealth Price Index.
Copayments and coinsurance are the amounts you pay for specific services after meeting your deductible. Copayments are fixed amounts, such as $30 for a doctor's visit, while coinsurance is a percentage of the cost of a service, such as 20% of a hospital stay.
It is also worth noting that not all major medical plans are eligible for premium tax credits, which can help lower insurance costs. Additionally, short-term health insurance plans and hospital indemnity plans are lower-cost alternatives to major medical insurance, but they may not offer the same level of coverage.
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Where can you get it?
Major medical insurance is typically offered by an employer, the government (through public health insurance programs such as Medicare and Medicaid), or can be purchased directly from a health insurance company.
If you work more than 30 hours per week for a large employer (50+ employees), your company must provide you with coverage that provides minimum value to comply with the ACA's employer mandate. This coverage is likely to be considered major medical insurance. However, some employers may choose to offer less comprehensive plans that do not meet the criteria for major medical coverage. In such cases, employees can opt to purchase major medical coverage in the exchange (Marketplace) and may even receive premium subsidies if their household income makes them eligible.
If you are not offered coverage by your employer and are not eligible for Medicare or Medicaid, you can purchase major medical insurance in your state's health insurance exchange/Marketplace. The cost of these plans can vary depending on factors such as age, location, and the level of coverage chosen.
It is important to note that the availability and requirements of health insurance plans can vary by state, so it is recommended to check the specific regulations in your state.
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What does it cover?
Major medical insurance is comprehensive health insurance that covers a wide range of healthcare expenses. It is designed to minimize out-of-pocket expenses for individuals and families. It covers all the minimum essential benefits and meets the standards of the Affordable Care Act (ACA) for individual and family coverage. It is often referred to as "real" health insurance and is considered a financial safety net that helps prevent fiscal calamities.
Major medical insurance typically covers preventive care, doctor visits, hospitalizations, surgeries, medications, and mental health therapy. It can also include emergency room visits, urgent care visits, and prescription medications. It is important to note that cosmetic procedures are generally not covered under major medical insurance.
The specific benefits covered under major medical insurance can vary depending on the plan and the state. However, some common benefits included in major medical insurance are:
- Ambulatory patient services
- Emergency services
- Hospitalizations
- Maternity and newborn care
- Prescription drugs
- Laboratory services
- Preventive care
- Mental health and substance abuse treatment
- Pediatric care
- Rehabilitation treatment
The cost of major medical insurance can vary based on factors such as age, location, tobacco use, and the level of coverage chosen. It is important to carefully consider the different plans available and select the one that best suits your specific needs and budget.
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How does it work with other insurance?
Major medical insurance is a comprehensive health insurance plan that covers serious illnesses, injuries, and preventive care. It is designed to provide extensive coverage for significant healthcare needs and minimize out-of-pocket expenses for the policyholder. While major medical insurance plans are comprehensive, they can be purchased alongside other insurance plans to supplement coverage.
Major medical insurance can be purchased through an employer, the ACA marketplace, or other sources. Many employers offer group health plans that qualify as major medical insurance. It's important to note that some employers may offer "mini-med" or "skinny" plans that provide minimum essential coverage but do not provide the same level of benefits as a major medical plan. These plans are typically much cheaper but may leave you underinsured in the event of a serious illness or injury.
If you are purchasing major medical insurance on your own, you can buy it through a state health exchange or directly from an insurance broker or company. You can also apply for insurance through a private company that isn't considered major medical health insurance. These non-major medical insurance plans do not have to cover pre-existing conditions and can deny or change your coverage based on your age or medical history. They are meant to supplement your main health policy and help with costs not covered by that policy.
Additionally, you can combine your major medical insurance with a Health Savings Account (HSA) to further manage your healthcare costs. HSAs allow you to set aside money on a pre-tax basis to pay for qualified medical expenses, reducing your taxable income. HSAs are only available with high-deductible health plans and offer the flexibility of rolling over unused funds year after year.
In summary, major medical insurance can be purchased alongside other insurance plans to supplement coverage, but it is important to carefully consider the benefits and limitations of each plan to ensure you have adequate protection in the event of a serious illness or injury.
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Frequently asked questions
Major medical insurance is comprehensive health insurance that covers medical services, hospitalizations, doctor visits, prescriptions, mental health and other types of healthcare. It is often referred to as "real" health insurance.
Major medical insurance covers all the minimum essential benefits and meets the standards of the Affordable Care Act (ACA) for individual and family coverage. It often covers preventive care services, urgent care visits, emergency room visits, prescription medications, and other routine medical expenses. It does not include limited benefit plans, fixed indemnity plans, dental/vision plans, accident supplements, health care sharing ministry plans, or critical illness plans.
Major medical insurance premiums vary depending on factors like age, location, tobacco use, and the level of coverage. In 2018, the average Obamacare nationwide open enrollment period premiums were $440 per month for individual coverage and $1,168 per month for family coverage. In 2025, the average health insurance cost for an ACA health insurance marketplace plan was $635 per month.
Major medical insurance can be obtained through an employer, the government (e.g. Medicare and Medicaid), or as a self-purchased plan.
