What Does Major Medical Insurance Cover?

Major medical insurance provides comprehensive health coverage in the United States. It protects individuals and families from the financial burden of significant healthcare costs, ensuring access to a broad spectrum of medical services without overwhelming out-of-pocket expenses. This type of insurance aligns with robust coverage standards.

Core Covered Services

Major medical insurance plans cover a wide array of medical services, including preventive care and treatment for various health conditions. These plans support overall health and address specific medical needs.

Preventive care is covered, often at no additional cost. This includes vaccinations, routine health screenings like mammograms or colonoscopies, and annual physical examinations. Preventive services encourage early detection and management of potential health issues.

Doctor visits are covered, facilitating access to primary care physicians and specialists. Plans cover consultations for routine check-ups, chronic conditions, or new symptoms. This includes referrals to specialists when necessary.

Hospitalization services are covered, providing financial protection for inpatient stays. This includes costs for surgeries, intensive care unit (ICU) services, and other medical treatments during a hospital admission. Coverage extends to facility charges, professional fees for physicians, and medical supplies.

Emergency services are a standard inclusion, covering costs from unexpected medical crises. This includes emergency room visits for sudden illnesses or injuries, and ambulance services. These services are often covered regardless of whether the provider is in-network.

Prescription drugs are covered, though coverage varies based on the plan’s formulary, a list of covered medications. Many plans categorize drugs into different tiers, with lower tiers having lower out-of-pocket costs.

Maternity and newborn care are covered, supporting individuals through pregnancy, childbirth, and postpartum care. This includes prenatal visits, delivery services, and care for the newborn immediately after birth.

Mental health and substance use disorder services are covered on par with medical and surgical benefits. This ensures access to therapy, counseling, inpatient and outpatient treatment for mental health conditions, and substance abuse rehabilitation.

Rehabilitative and habilitative services are included, helping individuals recover or gain skills for daily living. Examples include physical therapy, occupational therapy, and speech therapy, which assist in regaining function after an injury or illness, or in developing skills from birth.

Laboratory services and diagnostic imaging are covered for medical necessity, aiding in diagnosis and treatment planning. This includes blood tests, urine analyses, X-rays, MRI scans, and CT scans.

Understanding Cost-Sharing

While major medical insurance covers a wide range of services, policyholders share some costs with their insurance provider. This financial arrangement, known as cost-sharing, involves several components that determine an individual’s out-of-pocket responsibility.

A deductible is the initial amount an individual pays for covered medical services before their insurance plan begins to pay. For example, if a plan has a $2,000 deductible, the policyholder pays the first $2,000 of covered medical expenses in a policy year. After the deductible is met, the insurance company contributes to subsequent service costs.

Copayments, or copays, are fixed amounts paid by the policyholder for specific covered services at the time of care. For instance, an individual might pay a $30 copay for a doctor’s office visit or a $15 copay for a prescription refill. These amounts do not count towards the deductible but contribute to the out-of-pocket maximum.

Coinsurance is a percentage of the cost of a covered service that the policyholder pays after their deductible is met. If a plan has 20% coinsurance, the insurance company pays 80% of the allowed amount, and the policyholder pays the remaining 20%. This continues until the out-of-pocket maximum is reached.

The out-of-pocket maximum is the most an individual pays for covered medical expenses within a policy year. Once this cap is reached through deductibles, copayments, and coinsurance, the insurance plan covers 100% of further covered medical expenses for the remainder of that year. This limit provides financial protection against catastrophic healthcare costs.

Common Exclusions

While major medical insurance offers extensive coverage, certain services or situations are excluded. These exclusions define the boundaries of what a plan will and will not pay for, clarifying a policyholder’s financial obligations.

Cosmetic procedures are not covered unless medically necessary. For example, a nose job for aesthetic reasons is excluded, but reconstructive surgery following an injury might be covered if it restores function.

Experimental or unproven treatments are excluded from major medical insurance coverage. This includes therapies or procedures not demonstrated to be safe and effective through established medical research and regulatory approval processes.

Off-label drug use, prescribing a medication for a condition or in a manner not approved by the FDA, may be excluded. Insurance coverage depends on the plan’s policies and whether the use is medically accepted. Some plans may cover off-label use if supported by recognized medical literature.

Elective procedures not considered medically necessary are not covered. This includes certain types of bariatric surgery if specific medical criteria are not met, or other non-urgent procedures performed solely at the patient’s request without a medical indication.

Specific dental or vision care is often excluded from major medical plans, beyond routine pediatric coverage. Adults typically need separate dental and vision insurance policies for routine eye exams, glasses, contacts, and most dental procedures. Some medical plans may cover services like emergency dental work due to an injury.

Long-term care, such as extended stays in nursing homes for chronic conditions or assisted living facilities, is not covered by major medical insurance. These services address custodial care needs rather than acute medical treatment. Individuals often purchase separate long-term care insurance policies.

Travel insurance or medical care received outside the plan’s service area may be excluded, except in true medical emergencies. While emergencies are often covered globally, non-emergency care sought while traveling internationally or outside the plan’s defined geographic network requires a separate travel health insurance policy.

Types of Plans and Networks

The type of major medical insurance plan chosen impacts how an individual accesses care and associated costs. Plans are distinguished by network structures, which define “in-network” healthcare providers and facilities.

Health Maintenance Organization (HMO)

A Health Maintenance Organization (HMO) plan requires members to choose a primary care physician (PCP) within the plan’s network. The PCP coordinates all care and provides referrals to specialists. Services from out-of-network providers are not covered, except in emergencies.

Preferred Provider Organization (PPO)

Preferred Provider Organization (PPO) plans offer more flexibility than HMOs. Members can see specialists without a referral. PPOs have a network of preferred providers but allow members to seek care from out-of-network providers, though at a higher cost.

Exclusive Provider Organization (EPO)

Exclusive Provider Organization (EPO) plans are similar to HMOs, generally not covering out-of-network care except in emergencies. EPOs do not require members to select a PCP or obtain referrals to see specialists within the network.

Point of Service (POS)

Point of Service (POS) plans combine features of HMOs and PPOs. Members choose a PCP within the network, who provides referrals for specialist care. POS plans encourage in-network care but allow for out-of-network services, usually with higher cost-sharing.

The distinction between “in-network” and “out-of-network” providers is central to how these plans function. In-network providers contract with the insurance company, agreeing to specific rates for services, resulting in lower costs. Out-of-network providers do not have such agreements, leading to higher out-of-pocket expenses.