Limited-benefit plans are medical plans with much lower and more restricted benefits than major medical insurance, but with lower premiums. Limited-benefit plans include critical illness plans, indemnity plans (policies that only pay a pre-determined amount, regardless of total charges), and “hospital cash” policies. These plans are not regulated by the Affordable Care Act and are not suitable to serve as a person’s only medical coverage. But in some cases, they can be a good supplement to a high-deductible major medical plan.
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