What Is Major Medical Health Insurance, Really?

Understanding health plan terminology, options, and the various types of health plans available is critical to RVers. Understanding healthcare terminology is not easy, and often mis-understood. One reason is because the meanings of some terms changed when the Affordable Care Act became “law”. A prime example is the term, Major Medical.

There are two ways you can purchase a major medical health insurance plan. You can have a plan as offered to individuals and businesses through the Affordable Care Act, or a group insurance plan through your employer. If you are self-employed, some insurance companies will offer you group insurance as long as you have two full time employees, however this is not available in all states and it comes with a high price tag. 

Is An ACA Plan Deemed As Major Medical?

If you are an RVer and you purchase a plan that meets the minimal requirements of the health insurance laws under “the Affordable Care Act do you have major medical? The answer is yes…and no. As long as you seek medical services within your insurance company’s network, then yes, your plan can be considered major medical. 

Here are some typical essential health benefits that a proper health plan that we might brand as Major Medical, should cover.

  • Ambulatory patient services (outpatient services)
  • Emergency services 
  • Hospitalization 
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription Drugs

However, just because an insurance company is nationwide it does not mean you have a major medical plan, or access to covered healthcare outside of where you purchased the insurance.

The Exception To The Rule

We said there was a yes and a no to our major medical question, now let’s cover the “no”. Must an HMO plan pay for “out of network” hospital stays? The answer is a resounding no. If your health plan is a health maintenance organization ( HMO) or exclusive provider organization ( EPO ), it may not cover out-of-network care at all. This means you’ll be responsible for paying 100% of the cost of your out-of-network care. Once you leave the “service area” of the Affordable Care Act plan you purchased, you have left your health insurance where you purchased it, except for emergency services, as defined by the insurance company.

What Does That Mean to an RVer?

We all assume that if I break an ankle hiking a national park, or get a bug from some bad sushi while RVing, my emergency room costs are covered to some extent as outlined in the insurance policy…and you would be correct. In fact on healthcare.gov it states:

In a true emergency, go straight to the hospital. Insurers can’t require you to get prior approval before getting emergency room services from a provider or hospital outside your plan’s network.

Healthcare.gov – Getting Emergency Care

However, the minute they wrap that foot or administer meds or other services and tell you that you need to stay overnight for observation, the timer starts on your completely uncovered, out of network hospital stay. Cha-ching! If you need surgery or something major and can’t get back to your own network, you are in serious financial trouble, as your policy, if you haven’t done your research, has every right not to pay for those services. That doesn’t feel so much like major medical now, does it?

Doctor inspects man in hospital room
Although your emergency visit might be covered, will this hospital stay be covered?

What About Short-Term, Does That Count as Major Medical?

Short-term, limited-duration medical insurance, as defined by CMS.gov, is “a type of health insurance coverage that was primarily designed to fill gaps in coverage that may occur when an individual is transitioning from one plan or coverage to another plan or coverage, such as in between jobs. This type of coverage is exempt from the definition of individual health insurance coverage under the Patient Protection and Affordable Care Act (PPACA) and is therefore not subject to the PPACA provisions that apply to the individual market.” 

Short-Term Health Insurance for RVers

There are now more affordable short term options for health coverage that give you the ability to purchase short-term, limited-duration insurance policies that: 

  • Are less than 12 months; (360 days)
  • Contain important language to help them understand the coverage they are getting; and
  • May be renewed for up to 36 months. 

The Caveat to Short Term Medical

It’s very important to remember that short term benefits end at the duration stated in the policy. The short term insurance carrier DOES NOT automatically renew your policy, you must qualify for a renewal through medical underwriting. If your short term plan ends mid-year, this is not a qualifying event for you to enroll in an Affordable Care Act Plan, so you are uninsured until open enrollment. 

Short term plans are not major medical Insurance, they are a limited duration policy that automatically cancels, and are not guaranteed renewable. Therefore they are not considered major medical. 

If your short term plan ends mid-year, this is not a qualifying event for you to enroll in an Affordable Care Act Plan, so you are uninsured until open enrollment. 

Coleen Elkins – Managing General Agent at Medicare 4 Texas., LLC.

Indemnity Health Plans 

An indemnity health insurance plan is a healthcare plan that allows you to choose the doctor, healthcare professional, hospital, or service provider of your choice. It gives you the most flexibility and freedom available in a health insurance plan. Indemnity plans are not major medical plans, however most will guarantee renewal as long as you pay your monthly premiums. A few fast facts about indemnity plans, as outlined by thebalancemoney.com:

  • Indemnity health insurance plans are healthcare plans that allow you to choose a doctor, healthcare professional, or hospital.
  • An indemnity health insurance plan does not require you to choose a primary care doctor and allows you to self-refer to specialists, meaning you don’t need a referral.
  • Indemnity plans may require that you pay upfront for medical services and submit a claim to the insurance company for reimbursement.
  • You may need to pay a deductible or the amount you are required to pay before policy benefits are provided.
  • Some policies come with coinsurance, meaning you pay a percentage of your medical costs after meeting your deductible.

The indemnity health policy is different from policies offered by health maintenance organizations (HMOs) and preferred provider organizations (PPOs) because it allows you to obtain medical care where you choose to provide compensation for a set portion of the costs.

The kind of freedom available by an indemnity health insurance plan can be valuable in directing your own health care. This is significantly different from HMOs, IPAs, and PPOs which use managed care and may force you to choose a primary care provider as part of the plan. Some indemnity health insurance plans do not involve a provider network.

Is an Indemnity Health Insurance Plan Right for You?

Indemnity health insurance plans have the most advantages, especially for RVers, if the following apply to you:

  • Due to travel, you don’t wish to commit to a primary care doctor, which an indemnity plan allows.
  • To enjoy that flexibility, you don’t mind paying a little more for your health insurance costs or deductible.
  • You are willing to do a little more research with regard to cost. Because you are not part of a network in an indemnity health insurance plan, you won’t have the benefit of some of the fixed costs that an in-network-only major medical plan might have.
  • You live in a geographic region where access to the doctors and medical services you want would not be included in an HMO or PPO plan, or in the case of RVers, you are roaming all over the country.

The deductible in an indemnity plan may range from $100 to $300 for individuals and $500 or more for families and varies based on the insurance company. Once you pay the deductible, the plan would pay for the remainder of your health insurance costs up to the maximum limits in your contract agreement. Indemnity policies may also include copay or coinsurance clauses.

As an indemnity policy holder, you’ll need to familiarize yourself with the UCR, or the Usual, Customary, and Reasonable rate for services rendered in that geographic area. What this means for you, the RVer, is that for anything but emergency services, you’ll want to call various doctors and/or hospitals in your current geographic area to ask about the cost of those services.

 An MRI for example, might cost significantly more at the private hospital you were taken to, versus a public clinic, doctor’s office, or other emergency facility. Once you have found the lowest rate, let your insurance kick-in and then pay the deductible.

Major Medical Wrap-Up

As you can see, getting hung up on the term major medical is pointless. The most important thing for RVers is making sure you can get care when you are not in your home state or domicile state. We’ve only discussed fairly minor injuries…imagine a major injury, or a helicopter ride? Health insurance can be complicated, especially for RVers. That’s why the RVer Insurance Exchange is here. We excel and build a custom plan that works for you. Our agents are real RVers that actually have time to talk to you!

You can submit a free online quote, email us, or even give our agents a call at (800) 867-4330. Let RVerInsurance.com help you get out of the house and on the road…with proper coverage!

Coleen Elkins

Coleen Elkins

Coleen Elkins is the Managing General Agent at RV Insurance Benefits, and has been a full-time RVer since 2008.