Should You Get Major Medical Health Insurance? What It Is & What It Covers

Make no mistake: purchasing health insurance isn’t like buying a car. Health insurance is way more important, which means the stakes are way higher.

Still, health insurance consumers who’ve previously shopped for new cars can’t help but notice similarities in the experience. Just as some car shoppers are perfectly happy to drive home with the no-frills base model — manual windows and all — plenty of health insurance consumers aren’t interested in bells and whistles. They want the basics, nothing more.

Such consumers are often, though not always, good candidates for major medical health insurance, sometimes known as minimum essential coverage under the auspices of the Affordable Care Act. Here’s what you need to know about what major medical insurance covers and how to determine whether you’re a good fit.

What Is Major Medical Health Insurance?

Don’t confuse major medical health insurance with short term health insurance, says Simple Health CEO Steve Dorfman. Short-term insurance covers policyholders for 90 days or less, though pending federal regulatory changes may extend that period. By contrast, major medical plans endure as long as other ACA-compliant plans.

Speaking of the Affordable Care Act: newly issued major medical health insurance plans are by definition ACA-compliant, though they’re less generous than even basic Bronze plans. As long as your major medical health insurance plan remains paid up, you’re in good standing with the ACA’s coverage regime. (Bear in mind that the individual mandate was repealed as part of a federal tax reform package passed in late 2017, so non-compliance no longer carries a financial penalty; however, future federal legislation could reinstate the penalty.)

The one exception to major medical plans’ ACA compliance concerns “grandfathered” plans that existed before the ACA’s coverage requirements entered into force. According to United Benefit Advisors, these increasingly rare plans present challenges for employers and opportunities for individual policyholders fortunate enough (or not) to have maintained steady coverage for years running. If you’re carrying a grandfathered plan, you’ll want to make sure that it covers what you’d like it to cover — and what you think it covers. Simply scanning the ACA’s minimum coverage requirements won’t cut it here.

Are You a Good Fit for Major Medical Health Insurance?

Major medical health insurance plans generally don’t offer ancillary coverages for vision or dental services. Still, they’re ideal for a range of consumers, including:

  • Relatively healthy plan-holders seeking coverage for serious illnesses and injuries only
  • Budget-conscious consumers willing to exchange high deductibles and possible coinsurance requirements for lower monthly premiums
  • Consumers with the option to use employer-sponsored health savings accounts or flexible spending accounts to cover anticipated out of pocket healthcare expenses

Major medical health insurance generally isn’t a great fit for:

  • Families with complex medical needs
  • Children and adults who anticipate needing substantial amounts of care or a wide variety of services
  • Plan-holders willing to pay higher monthly premiums in exchange for lower out of pocket service payments, lower deductibles, and lower coinsurance and copayments

These rules aren’t absolute. Some major medical plans are surprisingly generous. You’ll need to evaluate coverage options available through the federal marketplace or (if offered) your state marketplace to determine whether more comprehensive major medical options exist in your area.

Major Medical Not Right for You? Your Ideal Coverage Option Is Out There

Major medical health insurance isn’t right for everybody. That’s okay — in the complicated world of health coverage, there’s simply no such thing as a one-size-fits-all policy type.

If you’ve determined that major medical isn’t in your best interests now and into the future, you have other options. Lots of them. Your next move is to use a reputable resource like Healthcare.gov to research each one, then connect with a trusted partner to help find the plan that best fits your health needs, lifestyle, and budget.

Don’t sweat it — stress isn’t a covered condition, after all. You got this.



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