In a basic hospital policy compared to major medical, which is true?

In a basic hospital policy compared to major medical, which is true?

• A. Basic hospital typically covers limited hospital expenses, whereas major medical provides broader protection with higher limits and coinsurance.
• B. Basic hospital has higher limits and broader protection.
• C. Major medical excludes inpatient care.
• D. Basic hospital covers all medical costs with no deductibles.

Answer: (A)

Basic hospital policies are limited-coverage plans that reimburse a relatively small, specific set of hospital expenses, often with fixed daily benefits and lower overall protection. Major medical policies, by contrast, are designed to address higher medical costs with broader protection, higher benefit limits, and cost-sharing features such as deductibles and coinsurance. That combination—broader coverage plus higher limits and a shared cost structure—best describes why the statement is true. The other descriptions contradict how these policies are typically structured: basic hospital doesn’t offer higher limits and broader protection; major medical does not exclude inpatient care; and basic hospital isn’t designed to cover all medical costs with no deductibles.

Basic hospital policies are limited-coverage plans that reimburse a relatively small, specific set of hospital expenses, often with fixed daily benefits and lower overall protection. Major medical policies, by contrast, are designed to address higher medical costs with broader protection, higher benefit limits, and cost-sharing features such as deductibles and coinsurance. That combination—broader coverage plus higher limits and a shared cost structure—best describes why the statement is true. The other descriptions contradict how these policies are typically structured: basic hospital doesn’t offer higher limits and broader protection; major medical does not exclude inpatient care; and basic hospital isn’t designed to cover all medical costs with no deductibles.