How does a major medical policy differ from a basic hospital policy?

• A. Major medical provides limited, specific hospital expenses.
• B. Major medical provides broad protection with higher limits and coinsurance.
• C. Basic hospital has higher limits than major medical.
• D. Basic hospital covers outpatient prescriptions only.

Answer: (B)

What’s being tested is how the breadth of protection and cost-sharing differ between major medical and basic hospital coverage. Major medical is designed to handle a wide range of medical expenses beyond the hospital stay itself, offering broad protection with higher annual limits. It typically involves a deductible and coinsurance, so you share costs after meeting the deductible, which protects you from very large bills from accidents, illnesses, or extensive treatment.

In contrast, a basic hospital policy is much more limited, usually covering only hospital room and board during a confinement and providing far lower limits with minimal, if any, coverage for physician services, outpatient care, or other medical costs. It doesn’t include the wide array of services and the same level of cost-sharing protection.

Thus, the statement that major medical provides broad protection with higher limits and coinsurance best describes the difference. The other options describe characteristics (limited hospital expenses, higher limits for basic hospital, outpatient prescriptions only) that don’t fit how major medical typically works.