There are many types of products being sold in the health insurance market; understanding the dierent types of coverage will allow
you to make a more informed decision when purchasing health insurance coverage. The purpose of this fact sheet is to highlight the key
dierences between major-medical health insurance plans, short-term health insurance plans, and supplemental health insurance plans.
MAJOR-MEDICAL HEALTH INSURANCE
Major-Medical Health Insurance is comprehensive coverage which, on average, pays for at least 60% (usually much higher) of your
expected healthcare costs throughout the year. Major-Medical Health Insurance plans cannot place lifetime or annual dollar limits on
coverage. Most plans have a maximum-out-of-pocket dollar limit, which is the most amount of money a consumer will be required to
spend on medical expenses in a given year. Once a consumer hits this limit, the insurance company will pay all medical bills for covered
services at in-network providers for the remainder of the year.
Additionally, the Major-Medical Health Insurance plans oered on DC Health Link to individuals or small businesses with 50 or fewer
employees are commonly known as Qualied Health Plans (QHP); these health insurance plans have 10 categories of essential health
benets that must be covered.
Unlike Short-Term Health Insurance and Supplemental Health Plans (explained below), Major-Medical Health Insurance cannot deny
you coverage based on your medical history. Also, having Major-Medical Health Insurance means you have met the Individual Shared
Responsibility Provision of the federal Aordable Care Act (commonly known as the “ACA” or “Obamacare”) and will not need to pay a
tax penalty with the Internal Revenue Service (IRS) (see below for more information).
SHORT-TERM HEALTH INSURANCE
Short-Term Health Insurance, also known as temporary health insurance, gap coverage or a short-term medical plan, lasts less than 365
days and cannot be renewed or extended. These products are exempt from the ACA requirements, so they do not need to cover the
same level of benets and services as Major-Medical Health Insurance. Unlike Major-Medical Health Insurance, these plans are unlikely
to cover prescription drugs, maternity care, or preventive services, such as immunizations or cancer screening. Additionally, Short-Term
Health Insurance can deny you coverage based on your medical history and exclude benets related to a pre-existing condition.
Short-Term Health Insurance will not excuse you from paying the individual mandate penalty (discussed below).
SUPPLEMENTAL HEALTH PLANS
Supplemental Health Plans may be known by a variety of names such as accident, illness, or xed-indemnity polices. Primarily, they are
intended to provide you with protections against out-of-pocket costs in case of an unexpected injury or hospitalization. Like Short-Term
Health Insurance, Supplemental Health Plans typically place a dollar limit on how much the insurer will pay for covered medical services
while you’re enrolled. Supplemental Health Plans will not excuse you from paying the individual mandate penalty (discussed below) and
can decline coverage based on your prior medical history.
IMPORTANT: In the District of Columbia, Supplemental Health Plans may not be sold to consumers who are not covered under a Major-
Medical Health Insurance policy.
FILE A COMPLAINT
If you have questions about the type of health insurance product you purchased, or believe you received misinformation about an
insurance product, please le a complaint with the District of Columbia Department of Insurance, Securities and Banking’s Consumer
Major-Medical Health Insurance vs.
Short-Term Health Insurance Fact Sheet
Department of Insurance, Securities and Banking (DISB)
Government of the District of Columbia
810 First Street, NE, Suite 701, Washington, DC 20002
Oce: 202-727-8000 | Fax: 202-576-7989
W
eb:
disb.dc.gov | Email: disb.communica[email protected]v | Follow us on Twitter @DCDISB