Limited health insurance plans provide plan participants with a fixed amount of coverage in the event that they incur certain kinds of medical expenses. The insured pay low monthly premiums for the coverage as well as high deductibles if and when medical costs are incurred. Limited health insurance plans provide customers with lower levels of coverage than standard insurance plans.
In many instances, limited insurance plans have annual coverage limitations which means the insurer will only cover claims up to a specified amount. Typically, medical expenses are broken down into various categories and the insurer places a monetary cap on each type of claim. An insurer may cover emergency room expenses up to a certain amount and place a separate limit on costs associated with visits to a physician. Additionally, most limited health insurance plans have an overall cap above which the insured is responsible for covering all additional costs.
Deductibles are a standard part of limited health insurance plans. These deductibles are much higher than on standard insurance plans and many people’s annual medical costs fall well below their own deductible. The insurance company only has to make a payout if claims exceed the annual deductible limit. Additionally, many insurance companies set separate deductibles for different kinds of costs such as prescription drugs, hospital visits and emergency room care.
Limited health insurance plans are widely marketed in countries that lack a national health insurance system. In these nations, private insurance plans are often expensive and many people lack the funds to purchase standard insurance policies. These low-cost plans provide minimal benefits to people who suffer only minor ailments. Many people refer to these plans as catastrophic coverage plans because people who incur major medical bills realize the benefit of these plans more than people who have minimal medical expenses.
Laws in many nations enable insurance firms to exclude people with certain pre-existing conditions from group health insurance plans. Insurers refuse to cover these individuals because of the likelihood of having to make significant payouts to cover the medical expenses of these individuals. Since limited plans have annual coverage limits, in many instances the insurance companies that offer these plans will provide coverage for anyone regardless of existing medical conditions. Consequently, limited health insurance plans are the only healthcare option for many people who suffer from serious conditions.
Critics of limited health insurance plans argue that people who cannot afford to buy standard plans lack the means to cover the deductibles on limited plans which means they are unable to realize the benefits of buying these policies. Advocates of limited plans argue that these policies enable people with major medical problems to reduce their out-of-pocket costs. As with any insurance plan, industry experts advise customers to review the terms and conditions of the plan to ensure that they understand the coverage limitations before they purchase a policy.