Understanding Limited Coverage Insurance Plans And How Do They Work

Understanding Limited Coverage Insurance Plans And How Do They Work


What are Limited Coverage Insurance Plans?
Limited Coverage insurance polices are basic travel medical insurance plans that provide pre-defined fixed dollar amount for each medical service. The video also explains an example as to how does a limited coverage plans work.

Limited coverage plan may not provide adequate coverage should you face a serious medical coverage. It is important to go through policy’s Description of Coverage to understand policy limitations.

Video Transcript:
What are limited coverage plans? Limited coverage plans are basic medical plans. The insurance pays only a predefined, fixed dollar amount for each medical service and the remaining amount becomes your liability. Let’s look at an example. Let’s say you bought a limited coverage plan with a deductible of . You have to visit the doctor and the doctor bill is 0. In this type of plan the benefit amount based on the schedule of benefits for a doctor’s visit is . That means the amount the insurance will pay for doctor’s visits is a maximum of but the deductible must be satisfied before the policy can pay for anything. In limited coverage plans, the deductible is taken from the benefit amount of , not the total bill amount from the doctor so the policy will pay , which is the allowed benefit amount of minus the deductible. You would then need to pay the remaining balance of the bill, which would be one hundred and sixty-five dollars. For any follow-up doctor visits since the deductible was already satisfied, the policy will pay the full amount of the allowed benefit for every doctor’s visit, which is and you would pay one hundred and fifteen dollars. After your doctor visit, let’s assume that the doctor prescribed you some medicines. Let’s say the prescription medicines cost four hundred dollars and the allowed benefit amount is one hundred and fifty dollars per incident. Since the deductible is already satisfied once per incident the policy will pay full allowed benefit amount of one hundred and fifty dollars leaving you with a remainder bill of two hundred and fifty dollars. Limited coverage plans may not provide adequate coverage should you face a serious medical condition. Any gap in coverage would become your responsibility. Make sure you go through the policy limitations carefully to avoid any frustration since the coverage limits may not be enough and you may end up paying a lot more from your pocket.