Many consumers purchase Hospital Indemnity Insurance Plans to help offset the hospital co-pays of their Health Insurance Plans such as Medicare.
Some of the better plans include daily hospital , ambulance, skilled nursing, durable medical equipment, lump sum cancer, and surgical benefits.
Health insurance does not cover all of the costs associated with injuries or illnesses.
In addition to deductibles and coinsurance, consumers may have extra expenses such as private room and private duty nursing fees, transportation, lawn and house care, and pet care.
So What Is Hospital Indemnity Insurance?
The first thing to understand is that hospital indemnity insurance pays cash benefits directly to the policyholder, regardless of any other insurance they may have. Since the benefits are paid directly to you, the funds can be used to pay off any expenses that you need to handle first.
In addition, many plans allow you to not only have the base coverage for each night that you spend in the hospital, but will also allow you to purchase riders to include such things as:
- Ambulance coverage – many times an individual might incur an ambulance charge (especially if they have a Medicare Advantage plan). By including this rider for a relatively low price, an individual can be paid benefits for this service without even spending a night in the hospital.
- Skilled Nursing Facility coverage – while traditional Medicare covers the first 20 days of skilled nursing facility care (after an individual spends 3 prior nights in the hospital before entering the facility), sometimes folks do not end up meeting the 3 day prior night requirement. Also, those folks covered by a Medicare Advantage plan may not have first day coverage and might have to cover a daily co-payment in the skilled nursing facility during the first 20 days. This rider puts the money directly in your pocket to use as needed.
- Lump Sum Cancer Rider – with cancer affecting so many folks above the age of 65, this rider is a very important one. If you were to be diagnosed with cancer, where would you want to be treated? Would you want to go to the best cancer specialist or facility for the type of cancer you have? Of course you would! This rider puts thousands of dollars in your hands upon diagnosis of a life threatening cancer so you can get the treatment you deserve.
Most Frequently Asked Hospital Indemnity Plan Question:
“If I have a Medicare Advantage Plan, a Group Health Plan, or even a High Deductible Medicare Supplement Plan, why would I need an additional plan such as this?”
The easiest way to explain this is with an example of a 65 year old consumer who has purchased a health insurance plan that has a hospital co-pay of $100 per day for the first 7 days (or a plan that has a $700 deductible) that the consumer is responsible for paying.
If this individual were to go into the hospital for a 10 day stay, they would be responsible for paying $700 in co-pays or deductible.
In addition, we are going to assume that this person was taken to the hospital by ambulance.
Using a very conservative co-pay, we will say that the health insurance plan that the consumer purchased has only a $50 co-pay for ambulance trips (many of the plans have ambulance co-pays that range from $100-$150 per trip).
Currently this consumer is now up to $750 in co-pays that they are responsible for.
This same consumer could purchase a hospital indemnity plan with an ambulance rider that would pay $100 per day in the hospital and $200 per ambulance trip for less than $15 per month.
This plan would have paid on this particular plan $700 for the hospital stay and $200 for the ambulance trip for a total of $900.
For most consumers it is much easier to budget a monthly premium of around $15.00 for Hospital Indemnity Insurance than to come up with $750 or more at one time.
Highlights of Hospital Indemnity Plans
Not all plans or riders are available in every state.
Hospital Indemnity Insurance plans are limited benefit plans that pay all benefits directly to the consumer.
Benefits will be paid in addition to any other insurance plan the policyholder might have.
These plans were not designed to be supplements to other health insurance plans nor replace any traditional health insurance plan that you might have.
Alternatives To Hospital Indemnity Plans
While a Hospital Indemnity Plan may be right for you, a more commonly purchased solution is a Medicare Supplement Plan.
Many of the plans, such as Medigap Plan F and Plan G, will cover the costs for whatever Medicare Part A does not cover.
Take Action!
Now that you have a much better understanding of Hospital Indemnity Plans, it’s time to discuss your situation with a Senior Benefit Services expert.
To see if a hospital indemnity plan is right for you, please a Senior Benefit Services Expert Agent at (800) 924-4727.
There is never any cost or obligation.