What is comprehensive coverage?
Comprehensive coverage – when we’re referring to health insurance, as opposed to automobile insurance – refers to a health plan that provides broad coverage of a wide range of healthcare services such as physician visits, hospitalization, and emergency room visits. Covered care can be preventive or provided to treat injury or illness. Comprehensive health insurance coverage is also known as major medical health insurance.
All new individual/family and small group major medical policies sold after January 1, 2014, must cover the ten essential health benefits outlined in the Affordable Care Act with no annual or lifetime benefit caps.
Major medical plans that were in effect prior to March 23, 201 can still remain in effect, but can no longer be sold to new individuals or employer groups. And major medical plans that were in effect in the individual and small group markets prior to 2014 can still remain in effect in most states, although they also can no longer be sold. These grandfathered and grandmothered plans are considered comprehensive, but they are generally not as robust as post-2014 policies, and do not include all of the same consumer protections.
Other than comprehensive health coverage, what other type of health insurance options do I have?
Health insurance plans that are not ACA-compliant are still for sale in most states. These non-compliant plans include short-term medical (STM) plans, fixed-indemnity plans, and narrowly focused coverage such as accident plans and critical illness plans. In most cases, however, these plans are not designed to serve as stand-alone coverage (they’re supposed to be supplemental to a major medical plan, as opposed to taking the place of it), and in some cases, like direct primary care plans, health care sharing ministry plans and Farm Bureau plans in some states, they’re specifically not even considered insurance at all.
What's the difference between comprehensive coverage and other types of health insurance?
Comprehensive coverage policies are typically more costly than limited-benefit plans, but they provide significantly more protection in the event of a medical claim. And with premium subsidies via the marketplace/exchange, comprehensive plans can end up being very inexpensive or even free, depending on the person’s income, age, and location (this is especially true for 2021 and 2022, thanks to the American Rescue Plan‘s subsidy enhancements).
The same is true of employer-sponsored coverage; even though it’s quite expensive overall, employers typically subsidize a significant portion of the premium, making it fairly affordable for employees to have coverage.
In contrast to comprehensive coverage, limited-benefit plans or supplemental policies may cover only specific conditions (e.g., cancer) or type of service (e.g., hospitalization), or have a dollar cap on coverage. These types of policies are not considered comprehensive, they are not minimum essential coverage, and they do not fulfill the ACA’s individual mandate if a consumer relies on them without any other coverage in place.
(While the ACA’s individual mandate is still officially in place, the associated federal tax penalty was eliminated effective with the 2019 tax year. The Internal Revenue Service (IRS) no longer imposes a penalty for individuals who do not have coverage, although DC and four states do impose a penalty on people who go without minimum essential coverage. And for people who experience a qualifying event and wish to enroll in a health plan outside of the annual open enrollment period, many situations require that the person already had minimum essential coverage in place in order to qualify for a special enrollment period. )
What types of health plans are considered comprehensive coverage?
Comprehensive coverage is provided by various types of health plans or policies:
- Most employer-provided health plans (All employer-sponsored health plans are considered minimum essential coverage by definition, but large employers can still choose to offer skimpy plans and simply pay the employer mandate penalty if their employees end up qualifying for subsidized coverage in the marketplace instead. This is fairly rare, however, and most employer-sponsored plans do provide comprehensive coverage)
- ACA-compliant policy purchased in your state’s health insurance exchange/marketplace
- ACA-compliant plan purchased off-exchange
- Medicaid and CHIP plans (there are some exceptions with Medicaid; some people qualify for limited-benefit Medicaid coverage, which is not considered comprehensive coverage).
- Medicare (either Original Medicare or Medicare Advantage, although Original Medicare is typically combined with a Medigap plan and Part D plan in order to provide truly comprehensive coverage)
Be aware, however, that the term “comprehensive” in regards to health insurance is sort of like the term “natural” in regards to groceries. It’s not an officially defined term, and has no particular marketing rules associated with its use. So a short-term health insurance plan — which is not minimum essential coverage and not regulated by the ACA — could still use marketing materials that describe it as “comprehensive.” This is a buyer-beware situation, and it’s important to read the fine print and understand the terminology that is legally defined, such as essential health benefits and minimum essential coverage.
What does a comprehensive health insurance policy cover?
Since 2014, new comprehensive health insurance policies issued in the individual and small group markets must cover the ACA’s ten essential health benefits.
For large group plans (in most states, this means more than 50 employees, although there are four states where the limit is 100 employees), there are no particular benefit requirements other than preventive care, but plans are required to provide minimum value, which means they have to cover at least 60% of average costs and provide substantial coverage for inpatient care and physician services.
COVID-19 vaccines as preventive care: There is normally a waiting period of a year (after a service is newly added to the recommended preventive care list) before health plans must start to cover it at no charge – and even then, it only has to be added when the plan is renewed or a new policy takes effect. But an exception was made for COVID-19 vaccines:
Under the terms of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, all private non-grandfathered health plans must offer coverage for COVID-19 vaccines, with zero cost-sharing, within 15 business days of the date the CDC’s Advisory Committee on Immunization Practices voted to add it to the list of recommended vaccines. This happened on December 13, 2020, so all comprehensive health plans in the U.S. are covering the cost of COVID-19 vaccines at this point.
Is comprehensive health insurance expensive?
Comprehensive (major medical plans) are more expensive than limited-coverage plans, but premium subsidies can bring down the price substantially, sometimes even resulting in free comprehensive health insurance. Even if you’re not eligible for a premium subsidy and have to pay full price for your coverage, a low-cost, limited-benefit option might not be a good deal in the long run. Insurance brokers are excellent resources to help you compare cost and value and find the option that makes the most sense for you (but you’ll want to make sure you work with a broker who is certified by the health insurance exchange in your state, to ensure that you’re being shown ACA-compliant plans and any subsidies for which you might be eligible).
Prior to the full implementation of the Affordable Care Act in 2014, there was a lack of transparency as to the benefits actually covered with any given health insurance policy. “Junk policies” with low prices and limited coverage led some consumers to believe they were protected against costs for illnesses and injuries when, in fact, the insurance companies had very limited liability – and consumers were stuck with big out-of-pocket bills. These plans are still available in most states, but if consumers shop in the health insurance marketplace in their state, they’ll avoid non-ACA-compliant plans and won’t inadvertently purchase sub-par coverage.
How much does comprehensive health coverage cost?
The overall cost of a health insurance policy includes premiums and cost-sharing.
A premium is an amount that people pay each month for health insurance coverage. A premium is the “cover charge” for having health insurance coverage. You are responsible for this expense whether or not you visit a doctor or use any other healthcare service.
Premiums vary significantly from plan to plan. According to the Kaiser Family Foundation (KFF), the 2020 average premium for employer-provided coverage for a single employee was $7,470. Of that total, the average worker share was $1,243 and the average employer share was $6,227 (these are annual amounts, so that works out to a little more than $100/month being payroll deducted for the average single employee).
KFF reported the average 2021 premium for marketplace individual plans by metal rating: $328/month for Bronze plans, $470/month for Silver plans, and $501/month for Gold plans. But those are before premium subsidies are added into the mix (you can think of premium subsidies as being sort of like the amount that employers pay to offset the cost that employees would otherwise have to pay for their employer-sponsored coverage).
In 2021, before the American Rescue Plan’s subsidy enhancements were applied, 86% of all marketplace enrollees nationwide were receiving premium subsidies, paid directly to their insurers on their behalf. While the average full-price premium amounted to $575/month, the average subsidy came to $486/month — covering the large majority of the average total premium.
And now that the American Rescue Plan (ARP) has made subsidies larger and more widely available, people are paying even less in after-subsidy premiums. For HealthCare.gov enrollees who have logged back into their marketplace account to activate their new ARP subsidies, the average after-subsidy premium for 2021 has dropped from $104/month to $62/month.
Cost-sharing is the patient’s portion of costs for healthcare services, therapy, or prescription drugs covered by their health insurance plan. The patient is responsible for paying cost-sharing amounts out-of-pocket. Cost-sharing is paid as a deductible, copayment, or coinsurance. KFF reported the average 2020 deductible for employer-provided coverage for a single employee was $1,644.
KFF also reported deductibles for marketplace plans: The average 2021 deductible was $6,921 for Bronze plans; $4,816 for Silver plans; and $1,641 for Gold plans, and $0 for Platinum plans (although Platinum plans are not available in many areas, and tend to be very expensive in terms of monthly premiums).