Hospital Indemnity Insurance

A Cash Benefit for Hospital Stays

Hospital indemnity insurance is a form of gap insurance that pays you. This plan provides cash payments for each day you spend in a hospital. Combined with a high deductible insurance plan, hospital indemnity plans can offer a cost-effective coverage solution to help you defray high deductibles if you are hospitalized.

What is covered by hospital indemnity insurance?

Coverage is triggered by a hospital stay whether planned or unplanned. Since hospital indemnity plans provide coverage based on the number of days in a hospital, there are no networks typically involved, giving you the freedom to use your benefits anywhere. The coverage payments can be used for anything, providing excellent flexibility.

Do hospital indemnity plans have a deductible?

Hospital indemnity plans have no deductible. Many people use hospital indemnity insurance payments to cover their health insurance deductibles when hospitalized. A hospital indemnity plan combined with a high deductible plan may be more cost effective than a healthcare plan with a lower deductible.

Is a hospital indemnity plan right for me?

Hospital indemnity insurance is not for everyone. They are not covered under the Affordable Care Act (“ACA” or sometimes known as “Obamacare”). This means that coverage may be denied for pre-existing conditions.

However, if you qualify, a hospital indemnity plan, when combined with a high deductible healthcare plan, can provide a cost-effective health insurance coverage solution. By defraying your deductible through daily payments, hospital indemnity can allow you to take advantage of lower cost, high deductible plans while cushioning or eliminating your exposure to the high deductible.

Many employers find that a combination of a higher deductible plan and hospital indemnity insurance provides the most cost-effective way to cover employee health benefits.

How does it work?

Say Jim buys a hospital indemnity plan that has a $30 per month premium, that provides coverage of $250 per day. Jim then requires a 7-day hospital stay after a traffic accident. Jim’s plan will pay $1,750 ($250 x 7) to Jim, who can then use that money to cover any deducible associated with his surgery or any out of pocket expenses.

The flexibility of hospital indemnity plan benefits means that Jim can also use that money for his car payment, rent or even to help support his wife during his hospital stay. Payments are not contingent on using any particular network or provider.

If you are interested in exploring how a hospital indemnity plan might be suited to meet your needs, please contact Peter Devine.