Comprehensive major medical

Comprehensive major medical is a term it pays to understand. Bankrate explains it.

What is comprehensive major medical?

A comprehensive major medical policy is an insurance policy with a low deductible and high maximum coverage limits, as well as a coinsurance provision, which combines basic coverage with major medical coverage.  The comprehensive major medical policy is the most common insurance today. It covers most of the expenses associated with injury and illness.

Deeper definition

A comprehensive major medical insurance policy covers the major portion of the charges incurred during hospitalization. Depending on your insurance provider and your policy, coverage may include expenses for the pre-admission diagnosis, which include payment to the medical specialist, lab work, exams and X-rays. In most policies, treatments for critical illnesses such as cancer are also covered by the plan.

Some insurance providers may cover over 75 percent of the total expenses. In most cases, you will need to seek treatment from accredited providers, although some policies provide reimbursement for treatments provided by non-accredited facilities and health care professionals.

Comprehensive major medical example

Let’s say you have a major medical policy with a $1,500 deductible, 80/20 co-insurance, and a $12,000 out-of-pocket maximum. You have incurred $1,000 in medical expenses this year. Last month, you used up a total of $10,000 for your injury-related operation. With comprehensive major medical coverage, you have to pay only $2,400 out of your own pocket for this operation.

Since you have already paid $1,000 on your deductible for the current year, you have a remaining $500 to pay ($10,000-$500), which leaves $9,500 that will be covered by the insurance company. Given the 80/20 co-insurance, you will have to pay 20 percent of $9,500, or $1,900. The total you will have to pay is your remaining deductible ($500) plus the co-insurance ($1,900), which is equal to $2,400.

A comprehensive major medical policy gives you the most benefit in the sense that it saves you from paying the deductible requirements on separate surgical, hospital and medical policies.

How is health insurance different from a comprehensive major medical policy? Find out from the experts.

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