In general, two types of coverage are available. The first is base (“basic”) plans, which provide coverage for major expensive items like surgery and hospital stays. These plans normally do not require patients to pay much out-of-pocket, and will cover expenses fully up to a certain pre-specified dollar amount. This maximum amount, though said to range from between $25,000 and $100,000, tends to dramatically vary depending on the plan.

Unlike base plans, major medical plans usually require members pay a deductible before coverage “kicks-in;” or insurance coverage sets-in. That means patients need to spend up to a certain preset amount out-of-pocket and once that amount has been reached, the plan begins to reimburse covered expenses. As with base plans, there is often a cap as to the outer limit to which the insurance company will pay. However, with major medical plans, the cap is typically set higher and, in some cases, there is no cap whatsoever for the lifetime of the plan. It is important to understand that even after your deductible has been satisfied, a major medical plan will usually cover only 70 to 80 percent of qualified expenses, never 100 percent, for participants in a major medical plan are always expected to pay some of the costs themselves.

However, major medical plans offer the advantage of covering a much broader range of services than do most base plans. For example, the former often covers services such as: x-rays, physical therapy, private nursing, laboratory services, rehabilitative services and ambulance service, etc., whereas the latter only includes provisions for the essentials.