Limited Medical Health Insurance Plans

Note:  You may read the update version of this page here.

In the individual health insurance industry there is so much terminology being used, it’s important to understand the differences and similarities of what is being offered. .Most insurance companies are looking for a different approach to set themselves apart with product innovation or the reintroduction of a new one as is the case with limited medical health insurance plans.

 At one point in time in our country’s history, before major medical plans evolved, mini medicals and limited medicals were the dominant coverage choice. Then, they were known as medical expense policies; today, though the nomenclature has changed, you may be familiar with prototypes like long term care or Medicare supplement policies. Presently, limited medicals are resurging due to consumers seeking health care alternatives, the decline in group employer coverage, and most importantly, affordability. 

What is a limited medical health plan?

A limited medical plan is a health plan that provides limited medical benefits up to a fixed dollar amount with a designated number of occurrences allowed.  For example, on doctor’s office consultations, benefit caps the reimbursement to the policyholder amount up to a set dollar figure; let’s say $100.00 per occurrence with a maximum of 4 visits permitted during a policy year.

On the other hand, a major medical includes comprehensive coverage with higher benefits limits. Thus, the carrier and the policyholder cost-share in the expense of the medical bill at a split percentage rate, let’s say, 80/20 or as a copayment amount up to a lifetime maximum. Hence, by limiting the benefit payout in a limited medical the carrier is able to offer lower premiums and utilize lenient underwriting criteria or none at all. In contrast, a comprehensive major medical plan is much more selective in their underwriting evaluation while offering coverage at higher premium amounts. 

As mentioned before, a major medical plan is more selective; therefore, the possibility exists for a carrier to decline your request for coverage during their full underwriting process. The criteria selection varies from one insurance carrier to another and so does the cost of health insurance.

Normally, insurance companies, such as, Aetna, Assurant Goldenrule, Humana, take into consideration certain  levels of risk based on your height to weight proportion, gender, age, credit worthiness, medical history, occupation, hobbies, lifestyle habits, as  determinants for offering or declining coverage.

If you happen to be overweight, some may accept you at a standard premium cost while others will impose a surcharge for what is considered a substandard risk. On the other hand, limited medical health plans reduce or eliminate their underwriting requirements, may or may not use premium surcharges for substandard risk, and are able to accept more members into their health plans.

Limited medical health insurance policies are available as a stand-alone plan with insurance benefits only or with additional value-added features such as savings on prescriptions, dental, vision or chiropractic services, legal consultation, hearing professionals and more.

There are a number of possible choices and finding what you need requires research, luck or locating a licensed insurance professional knowledgeable with limited medical plans benefits.

How do you make a choice?

You may choose to do research on the available limited medical health programs   in the marketplace or seek the guidance from a licensed insurance professional. An insurance agent/broker has the ability to sift through the number of choices available and recommend the appropriate one that best fits your specific needs and budget.

In choosing an insurance professional make sure you are working with someone who has an active license to sell in your state.

Contact your state’s Department of Insurance to assure you are working with an actively licensed agent, or you may do an online search through the division’s portal to check on the agents standing with the department prior to solidifying a business relationship.  

Rest assured that insurance agents are highly regulated, must take continuing education courses to maintain or increase their insurance knowledge and adhere to marketing compliance and professional ethical standards to maintain their license.