Major Medical Insurance

Comprehensive, ACA-qualifying healthcare coverage

Major medical insurance is comprehensive, long-term healthcare coverage. You may know it by a different name: “Obamacare insurance.”

Since the Affordable Care Act (ACA) went into effect in 2014, all medical insurance plans being sold as major medical coverage are required to meet a set of minimum coverage standards (see the next section).

Any health insurance plan that does not meet that minimum requirement is not considered a major medical plan.

What Does Major Medical Insurance Cover?

Long-term health insurance plans are required to cover the following healthcare services, often referred to as the 10 essential health benefits:

  • Ambulatory patient services

  • Emergency services

  • Hospitalization

  • Maternity and newborn care

  • Mental health and substance use disorder services, including behavioral health treatment

  • Prescription drugs

  • Rehabilitative and habilitative services and devices

  • Laboratory services

  • Preventive and wellness services and chronic disease management

  • Pediatric services, including oral and vision care

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Major Medical Insurance is Guaranteed Issue

Major medical insurance that qualifies as Obamacare is required under law to be “guaranteed issue.” That means you cannot be denied coverage based on health status (including pre-existing conditions), age, gender, or other factors.

However, you can be charged more for some things such as age, tobacco use, family size and geographic location.[1]

Do You Need Major Medical Insurance?

Beginning in 2019, the ACA individual mandate will no longer be enforced with a tax penalty for adults 26 and older that opt out of coverage without qualifying for an exemption.

Even though you won’t be required to carry a major medical policy under the law, you should still consider these more comprehensive plans if you:

  • Aren’t already covered on a parents’ or employer’s major medical plan
  • Have a pre-existing condition – major medical plans are guaranteed issue so you can’t be turned away because of past health conditions
  • Qualify for a subsidy – you may be able to get a better ACA plan at a more affordable rate than you think
  • Rely on prescription drugs – major medical plans are the only plans that require drug coverage

On the other hand, if you are younger, don’t rely on prescription medications and don’t have any pre-existing conditions, you may be able to get a lower cost (and less comprehensive) alternative health plan that primarily covers catastrophic injuries, and hospitalization due to an accident or critical illness.

Affordable Care Act FAQs

Obamacare, which is a nickname for the Affordable Care Act (ACA), remains law. As such, individual major medical insurance policies must be guaranteed issue. All individual major medical insurance must also include the 10 essential health benefits and no-cost preventive care as specified in the ACA. However, the ACA’s individual shared responsibility payment will be repealed Jan. 1, 2019.1 That means you will not owe a tax penalty if you go without minimum essential coverage in 2019. If you were uninsured in 2018 and did not qualify for an exemption from the individual mandate, you could owe the penalty when you file your 2018 federal taxes. Learn more about the tax penalty repeal and what it could mean for you in 2019.
The tax penalty was repealed effective Jan. 1, 2019.2 That means you won’t have to pay a federal tax penalty if you fail to enroll in minimum essential coverage for 2019. However, if you went without minimum essential coverage in 2018 and were not exempt from the individual mandate, you could owe the penalty when you file your 2018 federal taxes. Learn more about what happens if you don't have health insurance in 2019.
The Affordable Care Act makes subsidies available to qualified individuals who purchase health insurance from HealthCare.gov or a state-based exchange.   You can also obtain estimates while you are shopping by using an online calculator tool. Such estimates may help you decide which major medical plan to select and help you decide whether or not to enroll in additional coverage such as medical gap insurance or hospital indemnity insurance, which can help with out-of-pocket medical expenses. Estimate your subsidy now.

When Can You Get Major Medical Insurance?

Non-employer based major medical coverage can only be obtained during the annual open enrollment period (typically Nov - Dec) unless you qualify for a special enrollment period due to getting married or divorced, moving to a new state or area where your plan isn’t available, having a child or losing your job.

Don’t Qualify For Special Enrollment + Still Need Health Coverage?

If you missed open enrollment, don’t qualify for or missed your special enrollment period, and don’t qualify for Medicaid or Children’s Health Insurance Program (CHIP), an option available to you is to protect your health and finances with alternative health insurance coverage. 

These types of plans are not ACA-qualifying major medical coverage and generally provide less coverage and fewer patient protections than major medical plans.

Regardless, they can help fill a health insurance coverage gap so that you don’t pay for unplanned medical expenses 100% out of pocket.

Consider a fixed indemnity hospital plan, short term health insurance, or a combination of the two packaged together.

2 Ways to Get Started with a Major Medical Insurance Plan

Save on Healthcare Costs – Learn More at Our Blog

by Cathy Jakicic July 12th, 2019
by Sarah Sullivan June 27th, 2019

[1] ObamaCare Guaranteed Issue. (2018). Obamacare Facts. Retrieved 18 April 2018, from https://obamacarefacts.com/guaranteed-issue/