Major Medical Insurance: What Is It? (2025)

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Major medical insurance is comprehensive health insurance that covers medical services, hospitalizations, doctor visits, prescriptions, mental health and other types of healthcare. The vast majority of health coverage is considered major medical insurance, but there are lower-cost alternatives, such as short-term health insurance and hospital indemnity insurance, that are not considered major medical insurance.

Key Takeaways

Major medical insurance is comprehensive health insurance.
You can buy major medical coverage through an employer, the ACA marketplace or other sources.
You can usually purchase coverage during open enrollment or a special enrollment period if you qualify.

What Is Major Medical Insurance?

Major medical is comprehensive health insurance that’s offered through a workplace, public health insurance programs such as Medicare and Medicaid and the Affordable Care Act (ACA) marketplace. You can also buy it directly from a health insurance company.

This type of health insurance usually covers:

Emergency room care
Hospitalizations
Labs and tests
Mental health
Outpatient care
Physician visits
Pregnancy, maternity and newborn care
Prescription drugs
Preventive care
Rehabilitative services
Surgeries
Urgent care

Two types of health plans that don’t offer that level of coverage include short-term health insurance and hospital indemnity plans. Short-term health insurance, which isn’t allowed in some states, only lets you have coverage for three months with the option of adding a fourth month.

Short-term plans have low costs but they also don’t offer nearly as much coverage as major medical plans. Short-term plans can have exorbitant out-of-pocket costs when you need care.

Hospital indemnity plans provide a fixed benefit if you’re hospitalized. Hospital indemnity plans don’t provide coverage like major medical but should be seen as supplemental coverage to help pay for healthcare alongside a major medical plan.

Types of Major Medical Insurance

There are various ways to get major medical insurance.

Type of coverage	What it entails
ACA marketplace	You can purchase private health insurance through the health insurance marketplace. These plans are the only ones that offer subsidies and premium tax credits based on household income.
Employer-sponsored health insurance	Most working Americans get their medical coverage through group health insurance coverage from an employer. In many cases, employer-sponsored health insurance offers the most affordable and comprehensive health insurance option because employers typically pay more than half of premiums costs.
Health insurance sold directly from an insurance company	You can buy health insurance directly from an insurance company. This is often more expensive than employer-sponsored plans since you don’t receive help paying premiums.
COBRA	If you have coverage in a major medical plan at work and then lose coverage, COBRA insurance is an option for extending your coverage for a period, usually 18 to 36 months.
Medicaid	Medicaid is a federal/state health insurance program primarily for low-income Americans and eligible children, pregnant women, the elderly and those with disabilities. Medicaid costs are based on your income.
Medicare	Medicare is the federal health insurance program primarily serving adults 65 and older. It also offers coverage to younger people with specific disabilities and those with end-stage renal disease.
Student health plans	This type of health insurance is typically available to college students, though young adults can also stay on a parent’s health insurance plan until they turn 26.

Who Needs Major Medical Insurance?

Major medical insurance is essential for nearly everyone. A comprehensive health insurance plan offers a financial safety net that helps prevent fiscal calamities.

Major medical covers preventive care and doctor visits that may help you prevent more costly and dangerous health conditions. It can also help you manage chronic conditions, cover hospitalizations, surgeries, medications and mental health therapy.

Skipping major medical insurance may leave you with hefty healthcare bills and can force you to avoid needed medical care because of costs.

How Much Does Major Medical Insurance Cost?

The average health insurance cost is $635 monthly for an ACA health insurance marketplace plan. Costs vary by multiple factors, including metal tier.

The average costs are:

Bronze plan costs $543 per month.
Silver plans cost $660 per month.
Gold plans cost $708 per month.
Platinum plans cost $1,209 per month.

The averages don’t consider premium tax credits and subsidies that can reduce costs for an ACA plan based on household income.

Another cost factor is age.

Average Cost of Health Insurance by Age

A plan’s benefit design also influences costs. Health maintenance organization (HMO) and exclusive provider organization (EPO) plans are typically cheaper than preferred provider organization (PPO) plans, but they aren’t as flexible as PPOs. Here’s the average cost by plan type.

Average Cost of Health Insurance by Plan Type

Major Medical Health Insurance vs. Short-Term Health Insurance

Major medical health insurance provides comprehensive coverage, while short-term health plans should be viewed more as a way to bridge a coverage gap between jobs and similar situations.

Short-term plans are much cheaper than major medical plans, so they may be an alternative if you typically don’t need much healthcare services and only need coverage for a short time.