Basic medical expense insurance is sometimes called “first dollar” insurance, because unlike major medical expense insurance, it provides benefits up front, without requiring the insured to satisfy a deductible first. Coverages are classified according to categories of medical care: hospital expense, surgical expense, and physician’s (non-surgical) expense.
Hospital expense insurance reimburses policyowners for the cost of hospital confinement. In addition to the room and board, hospital expense policies cover “hospital extras”, or miscellaneous charges, such as drugs, x-rays, anesthesia, lab fees, dressings, use of the operating room, and supplies, up to a specified limit.
Surgical expense insurance provides coverage for the cost of a surgeon’s services, whether the surgery is performed in the hospital or out. Under the surgical schedule method, every surgical procedure is assigned a dollar amount by the insurer. If the surgeon’s bill is more than the allowed charge set by the insurer, it is up to the insured to pay the difference.
Basic physicians’ expense insurance provides benefits for nonsurgical physicians’ services, such as office visits and the care by a physician in a hospital for a nonsurgical reason. These benefits are usually limited.
Although the coverage is not broad as in a comprehensive major medical insurance plan, it is usually significantly less costly and operates under the premise that the individual is more readily able to pay the less costly office visits and not the more costly hospital stays.