Learn the pros and cons of comprehensive health insurance.
Comprehensive health insurance refers to health insurance that covers major medical conditions like back injuries, diabetes or other diseases, and other acute and chronic health problems. This type of insurance is also referred to as "major medical." Major medical insurance is sold through insurance companies, called health insurers, that specialize in managing risks related to illness and injury. When you buy comprehensive health insurance, it's a good idea to know the pros and cons of this type of insurance.
Cost
The major disadvantage to comprehensive health insurance is the fact that it costs more than a supplemental insurance plan. Comprehensive health insurance is priced based on the group you belong to if you are in a group health plan or in a risk pool if you have an individual health insurance plan. But the premium cost of comprehensive health insurance is covering a wide range of illnesses whereas a supplemental plan may only cover one or two conditions at most per policy.
Coverage
Comprehensive insurance provides a wide range of coverage. This means that the policy will cover a majority of illnesses and injuries you could suffer during your life. Comprehensive insurance typically covers hospital stays, chronic illnesses like diabetes, acute injuries like a broken bone or regular doctor visits. Comprehensive insurance pays for the cost of treatment. The payment is sent directly to your doctor or hospital. Other types of insurance, like supplemental insurance, pay you a smaller amount of money that can be used for any reason. This money is not used specifically to pay for your medical bills, however.
Portability/Flexibility
Comprehensive health insurance can be portable if it is a private policy, but you will need to purchase a new health insurance plan if you move out of your state or out of your health plan's service area within your state. Group health insurance policies have state- and federal-mandated continuation coverage that allows you to keep your health insurance until you find other insurance. These continuation benefits are enforced under COBRA and apply to all states. This means that you won't stop receiving treatment for any health condition if you lose your health insurance where you work. If you have private insurance, your policy will pay regardless of where you work.
COBRA benefits remain largely the same in 2010. However, under the American Recovery and Reinvestment Act of 2009, you receive a 9- month subsidy that pays for 65 percent of your premium payments if you would normally qualify for COBRA benefits under existing laws. Additionally, involuntary termination following a reduction in hours is considered a qualifying event for the COBRA subsidy if the termination occurred between September 1, 2008 and May 31, 2010. The 9-month subsidy benefit can also be extended to 15 months of reduced coverage if you are still eligible for COBRA after 9 months. After the extension, you must pay the full COBRA premium.
Guaranteed Renewability
Group health insurance often guarantees renewability. This means that you can renew your insurance coverage regardless of your health condition. This is a major advantage, especially if you or your family needs treatment and your policy is about to renew. The insurance company is typically not allowed to cancel coverage, though you should verify with your state's laws concerning guaranteed renewability if this provision applies in your state (see Resources).
The new health insurance law passed in 2009 mandates that all heath insurance plans offer guaranteed renewability. This means that you may renew your insurance plan in any state regardless of your health status.
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