What is a "limited benefit plan"?

A limited benefit plan is characterized by its focus on providing coverage for only a defined set of services or conditions. This means that the insurance will not offer comprehensive benefits for a wide array of healthcare needs but is instead tailored to address specific issues or situations. These plans are often designed for people seeking affordable options but are aware that they will not have coverage for every possible healthcare expense.

In contrast, a plan that offers extensive coverage at a low premium typically does not align with the characteristics of a limited benefit plan, as the latter is meant to be restrictive in terms of the services provided. Similarly, a health insurance policy that covers all medical expenses is fundamentally comprehensive and would not be categorized as limited. Lastly, while limited benefit plans can sometimes serve as supplemental insurance, their defining trait remains their limited scope of coverage rather than being classified strictly as a form of supplement. Therefore, the key feature distinguishing a limited benefit plan is its specific coverage limitations, making the identification provided accurate.