What is Meant by Major Medical Insurance?

Major medical insurance cover is the name given to one particular form of what is commonly referred to today as indemnity or fee-for-service health insurance.

Escalating medical costs these days mean that we are progressively moving away from traditional types of medical insurance and the original fee-for-service medical insurance plan is rapidly being replaced by a number of other plans including HMO (health maintenance organization) plans, PPO (preferred provider organization) plans and POS (point of service) plans.

Basically fee-for-service medical insurance plans are designed to cover unforeseen medical expenses due to illness or injury and give plan holders significant freedom in picking where treatment is taken and by whom such treatment is given. Fee-for-service plan holders are also usually responsible for paying for treatment and for then reclaiming the cost from their insurer.

Newer plans by contrast focus much more on routine medical care with the intention of avoiding unnecessary costs by keeping plan holders well and identifying problems at a very early stage when they are hopefully simple to treat. These newer plans simplify administration for plan holders but also take away much of the freedom to decide where and from whom treatment is to be received.

Most people today are covered by the newer types of medical insurance instead of by traditional fee-for-service plans primarily not only because of their reduced cost but also because there is a lot less administration when it comes to making claims against your plan. In addition, a rising number of employers who offer group health insurance plans for their employees are also opting for these newer types of plan. All the same, there is still a large number of people who want the freedom of choice which a fee-for-service plan gives them and it is here that you may want to look at major medical insurance coverage.

Fee-for-service plans provide three forms of coverage; basic health insurance, major medical insurance and comprehensive insurance.

Basic health insurance plans vary from one insurer to the next but will usually cover hospital treatment (plus the cost of room and board), some hospital services (like x-rays and medicine), surgery (whether done in hospital or another recognized surgery center) and some doctors visits.

By contrast major medical insurance plans are designed to cover the treatment of long-term and high cost illnesses and injuries and both in and out-patient expenses associated with such illnesses and injuries.

Finally, comprehensive insurance cover is merely a plan which encompasses both basic and major medical coverage.

Perhaps not surprisingly major medical insurance is a popular choice as many people are only too happy to pay the day to day cost of medical care but are worried about how they would cope in the event of a major illness or accident which might involve large medical expense which could drag on for weeks, months or even years.

Sadly, the security and choice that is provided by major medical insurance is reflected in the cost of fee-for-service plans generally and thus it is increasingly becoming an option which a lot of people would like to select but one which is simple becoming too expensive.