Affordable Care Act

What Is Major Medical Insurance?

Updated on December 18, 2019


Major medical health insurance covers all the minimum essential benefits and meets the standards of the Affordable Care Act (ACA) for individual and family coverage.

Understanding major medical health insurance plans

Major medical health insurance plans are the type of insurance people are referring to when they talk about typical health insurance coverage. These plans comply with the ACA’s regulations for qualifying health plans. They offer the ten essential benefits:

  • hospitalization
  • outpatient procedures (also called ambulatory care)
  • preventive care like check ups and immunizations
  • prescription medicine
  • mental health and addiction counseling
  • laboratory services
  • emergency services
  • pediatric services
  • maternity and newborn care

These plans aren’t only sold through the official state and federal marketplaces. They can be sold off-exchange through licensed private brokers. For example, eHealth is a private marketplace that sells major medical plans alongside other insurance options like individual and family plans, and alternative coverage options like short term health insurance.

Benefits and drawbacks of major medical health insurance

Major medical health insurance covers the most necessary care associated with serious illness and hospitalization, along with plenty of additional benefits.
However, these plans may cost more than other options in monthly premiums due to those hefty benefits. A major medical health insurance plan that is sold during open enrollment or a special enrollment period can qualify for subsidies that significantly reduce the cost of premiums.

Buying major medical health insurance on and off the exchange

Major medical health insurance can be purchased through official health insurance exchanges and through licensed brokers like eHealth who are allowed to sell qualifying health plans. However, you are limited to buying on an exchange during certain times of year. This includes each year’s open enrollment period. You can also qualify for what is known as a special enrollment period if you have a qualifying event. These include:

  • changing jobs
  • getting married or divorced
  • having a child

If you wish to buy major medical health insurance at other times of year, or if you wish to purchase a plan that is not offered on the exchange, you also have the option of buying a policy off the exchange. Buying an off exchange policy, however, may have certain drawbacks. If you buy major medical health insurance off the exchange, for instance, you are probably not eligible for subsidies. Since these subsidies can have a major impact on the monthly premium cost, the monetary difference between on and off exchange plans can be significant even if the coverage is similar.

Alternatives to major medical health insurance

The elimination of the health insurance penalty means that more people are consider alternatives to conventional major medical health insurance. One alternative that some people choose is catastrophic health insurance. Catastrophic plans differ from major medical health insurance in that they only offer a very limited range of benefits. These plans will typically cover expenses associated with a hospitalization, surgery or major illness or injury. However, they will not cover preventive care or more minor health issues. The premiums for these plans is far lower than the premium for major medical health insurance to reflect the lower coverage levels.
Short term health insurance allows people to buy coverage that lasts only a couple of months instead of a full year of coverage at a time. Short term health insurance can be a good option if you are moving or suffer job loss.
When choosing between major medical health insurance and other options, it is best to consider your most likely health scenarios, as well as your personal financial situation. Thinking about the amount of money you have saved, whether you are likely to need medical care and other options can help you choose the right coverage option for you. At eHealth, we offer major medical along with other options so that you have the freedom to pick the plan that fits your needs and your life.

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