What Is Major Medical Insurance?

Major medical insurance cover is the term used to refer to one particular form of what is usually referred to today as fee-for-service or indemnity health insurance.

Climbing medical costs in recent years mean that we are gradually moving away from traditional types of medical insurance and the original indemnity medical insurance plan is now being replaced by various other plans including HMO (health maintenance organization) plans, PPO (preferred provider organization) plans and POS (point of service) plans.

In essence indemnity medical insurance plans are intended to provide cover for unanticipated medical bills due to illness or injury and give policy holders extensive freedom in deciding where treatment is sought and by whom that treatment is provided. Indemnity policy holders are also commonly responsible for making payment for their treatment and then reclaiming the cost from their health insurer.

Newer plans by contrast focus far more upon routine medical care with the objective of avoiding unnecessary costs by keeping policy holders in good health and identifying conditions at an early stage when they are hopefully easy to treat. These newer plans simplify administration for policy holders but also remove much of the freedom to decide where and from whom treatment may be received.

Most people today are covered by the newer types of medical insurance instead of by traditional indemnity plans principally not only because of their lower cost but also because there is a lot less administration when it comes times to make a claim against your policy. Additionally, a rising number of companies who offer group health insurance plans for their employees are also picking these newer plans. Nevertheless, there is still a large number of people who want the freedom of choice which a fee-for-service policy allows them and it is here where you might wish to consider major medical insurance coverage.

Indemnity plans provide three forms of coverage; basic health insurance, major medical insurance and comprehensive insurance.

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

Major medical insurance plans by contrast are intended to cover the treatment of high cost and long-term injuries and illnesses and both in and out-patient bills associated with such injuries and illnesses.

Comprehensive insurance cover is merely a policy which includes both basic and major medical coverage.

Perhaps not surprisingly major medical insurance is a popular choice as most people are quite happy to bear the day to day expense of medical care but are worried about how they would cope in the event of a major accident or illness which could involve substantial medical expense which might drag on for months or even years.

Sadly, the security and choice that is provided by a major medical insurance policy is reflected in the cost of indemnity plans in general and thus it is becoming more and more of an option which a lot of people would like to choose but one which is simple becoming too expensive.

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