Hassle-Free Health Coverage: Major Medical vs. Basic Medical

For many, major medical is the most feasible health care plan in spite of its deductible and coinsurance provisions. The "bag of money" concept works bet-ter-is more affordable or available-in the present health care environment than a pure indemnity plan's first-dollar coverage approach.

An important point: With the major medical approach, not only inpatient expenses are covered but outpatient expenses are, too. Outpatient diagnostic services, doctors office calls, etc., are covered expenses under the major medical plan.

The same bag of money used to pay inpatient expenses can be used to cover outpatient expenses subject to the plan's deductible and coinsurance features. In addition, the major medical approach may not involve the limitations of time and money that a basic plan does.

The major medical plan will have a lifetime maximum benefit such as $1 million or $2 million. Some plans are even written with an unlimited lifetime maximum.

This form of limitation is much more workable than one which limits dollars for specific expenses such as surgery and room and board expenses. It is unlikely that an insured will "run out of money" with the major medical plan.

With regard to the cost of the plans, the premium for a major medical plan could be less than the premium for a basic medical expense plan. This is especially true if the individual is relatively young and has no dependents. The size of the deductible and the coinsurance provisions can usually result in a lower premium than for a plan which has no deductibles or coinsurance.