3 Reasons Why Hospital Indemnity Insurance Is Worth It

Unexpected medical costs may have a negative impact on your general health and finances. Furthermore, even though health insurance contributes to the cost of medical care, there may still be additional costs that accumulate. In fact, even among those with health insurance, one in eight Canadians owes $10,000 or more in medical debt, according to research. You may manage your hospital bills and any other costs that may arise from staying in the hospital by purchasing hospital indemnity insurance. Find out 3 reasons why hospital indemnity insurance is worth it.

For personalized advice on hospital insurance, contact us at sureinsurance

What Are Hospital Indemnity Insurance Policies?

One kind of additional insurance is hospital indemnity insurance, which provides a set financial reward for hospital admission and other in-patient care. These plans are occasionally referred to as “hospital insurance.”

Once more, these circumstances are for inpatient settings. Stated differently, you are admitted to the hospital for a single night.

Hospital indemnity insurance pays out on a set monetary benefit because it is an indemnity plan. You can pay for out-of-pocket hospital fees like deductibles and coinsurance on your underlying health insurance with this money, or you can spend it however you like.

Major medical insurance and high-deductible health plans are ideal pairings for hospital indemnity coverage. Furthermore, a lot of providers provide hospital indemnity insurance, which helps to reduce a lot of the out-of-pocket expenses related to Medicare Advantage Plans. The general operation of hospital indemnity policies is as follows:. Assume you have a $4,000 deductible in your high-deductible health insurance plan. Assume for another moment that you are hospitalized due to an illness. You spend three days in the hospital. An insurance policy for hospitals may pay:

• $1,000 for the hospital admission
• $3,000 for each day in the hospital ($9,000)

Ten thousand dollars is paid to you in one lump sum, which you can use to cover hospital bills, your deductible, and other expenses.

This is hospital indemnity insurance, to put it briefly.

Tell me the truth, please. That seems perfect, doesn’t it? Imagine that you trip and fall off the ladder when cleaning your gutters. You’re in tremendous pain. You are most likely still in the deductible phase of your health insurance. This implies that you could have to pay a large medical and hospital fee.

An insurance policy for hospital indemnity helps cover those expenses. Get further professional advice on that here.

Many Types Of Hospital Indemnity Insurance Plans Exist

There are several types of hospital indemnity plans. Plan options are dependent on your:

• Age and type of health insurance you have
• What kind of preferences and options that you want

There are actually two types of hospital indemnity plans: one for those under 65 who want to see what is covered by their high-deductible health plan, a group employer plan, or Affordable Care Act (ACA) plan hospital indemnity insurance.

The other is available to Medicare Advantage plan holders who are over 65.

Hospital Indemnity Insurance Plans For Those Under The Age of 65

Under 65-year-olds enrolled in group employment plans or ACA-exchange plans are eligible for the following benefits from hospital indemnity insurance (generally speaking, subject to change by carrier):

• A lump sum hospital confinement benefit
• A daily hospital benefit

These benefits are yours if you are admitted to the hospital and are determined by the terms of your insurance policy.

Carriers always search for a competitive advantage, as I have discussed previously. Are there any issues you see with the above? Yes, it is correct. Benefits are only granted in the event that you are admitted to the hospital. How would an outpatient surgery work? Therefore, in the case indicated above, you will not be eligible for a benefit unless you are admitted as an inpatient following your surgery.

Some find that objectionable. However, a lot of hospital indemnity insurance plans for individuals under 65 have grown and added features in recent years. While some carriers include these extra perks as standard features in the base package, others only offer them as an option.

New Plans Available For The Under 65

Plans like these are referred to as gap insurance plans. These are comparable to hospital indemnity plans, but they provide far greater coverage for other costs, such as (but not restricted to):

• Emergency room visits – for treatment in the emergency room or urgent care
• Rehabilitation – pays for rehab at a qualified facility under a doctor’s order
• Intensive care unit coverage – pays an additional payout if you are in the ICU
• Physician care – pays for doctor office visits for covered accidents and illnesses
• Preventative care – pays for procedures defined under the Affordable Care Act
• Labs, x-rays, imaging, and diagnostics pay for these services when connected to a covered illness or accident
• Ambulance – for travel in a ground or air ambulance
• Outpatient surgery: – pays a lump sum, like $3,000, towards an outpatient surgery like an ACL repair, kidney stones, etc.
• Prescription drugs – some plans will pay a benefit for prescription drugs (yes, even if you have prescription insurance through your primary health insurance).
• Other medical services

These days, a lot of hospital indemnity plans include these supplementary benefits in the standard contract or provide them for a separate fee.

Recall that these benefits are usually provided in the form of a fixed cash amount or lump sum that you can apply to any purpose, including paying for your own medical expenditures.

Hospital Indemnity Insurance For Medicare Beneficiaries

Medicare recipients might choose to purchase their own plans for hospital indemnity insurance. You have the option to buy an indemnity plan to complement your Medicare Advantage plan if you enroll in one.

This page is not intended to explain Medicare Advantage programs or the hospital indemnity plan structure. Nonetheless, the advantages are comparable to those of the recently introduced under-65 indemnity plans available on the market. Stated differently, Medicare Advantage subscribers’ hospital indemnity policies usually cover (depending on the specific carrier):

• Skilled nursing provides daily benefits
• Ambulance coverage
• A daily hospital visit benefit
• MRI, diagnostic imaging
• Outpatient surgery benefits
• Physician/doctor office visit benefit
• Some coverage for a chronic condition or chronic illness
• A lump sum accident benefit for a sudden accident

Medicare Advantage plans are augmented with hospital indemnity policies, which provide a plethora of choices and coverage.

If you’d like more information about the Medicare beneficiary plans, get in touch with us.

3 Reasons Why Hospital Indemnity Insurance Is Worth It

We’ve talked about the definition and coverage of hospital indemnity insurance plans thus far. Perhaps you’re wondering if a plan is appropriate for you. These three factors shows the reasons why hospital indemnity insurance is worth it.

1. Financial Protection

If you haven’t observed the worrisome rate at which medical expenditures are rising, you are living under a rock. Even with employer-sponsored health insurance, I’m sure you’re feeling pain.

Health insurance itself is another area where people make savings. Many people just reduce or cancel their coverage, which raises the possibility of having to pay more out of pocket. Although your premium is lower, you may have to pay more out of pocket. In what way does that assist you? The more you require health insurance, the more expensive it will be.

One of the reasons we believe hospital indemnity insurance is cost-effective is because of this.

Furthermore, you can easily preserve your plan’s out-of-pocket limit and deductible. It’s accurate! Stated differently, you can open an emergency savings account and maintain a suitable amount of cash set aside for medical costs. Assume that your out-of-pocket limit (with the deductible) is $10,000 and that your deductible is $5,000. As a result, you must have at least $10,000 saved.

2. Saves You Money

Example Of How A Hospital Indemnity Insurance Plan Saves You Money

Assume you are a 40-year-old, non-smoker who is in good health. You have a $6,300 maximum out-of-pocket expense and a $1,450 deductible. The premium for each month is $652.

In your location, a new plan is visible. It’s a high-deductible health insurance plan because it qualifies for the Health Savings Account. You would like to make a contribution to an HSA, but you don’t want to be exposed to excessive medical costs. The $6,900 deductible of the new plan is followed by a 0% coinsurance after the deductible is satisfied. You believe that’s great because the maximum out-of-pocket cost is almost the same as what your existing plan covers. Additionally, the monthly cost is $399, which is $253 less than your existing plan.

You don’t believe that the high out-of-pocket expense exposure ($1,450 versus $6,900) can be reduced. However, with hospital indemnity insurance, you can.

A $6,350 lump sum hospital admission benefit and a $200 daily hospital benefit are features of one hospital indemnity plan we work with. You also qualify for a lump sum payout of $3,000 for any procedure. This will set you back $66 a month.

3. Portability

Your hospital indemnity insurance is transportable. Not in the strict sense, anyway. Your hospital indemnity insurance follows you no matter where you work.

I talk to a lot of folks that believe portability isn’t that significant. Yes, it is. Through their group plans, many businesses provide insurance similar to hospital indemnity. They are typically inexpensive (naturally, given that the employer most certainly pays a share of the premium). However, the coverage disappears if you quit or get a new employment. Unless, of course, you have a personal strategy that you adhere to.

Hospital indemnity insurance is also cost-effective due to its mobility.

Additionally, hospital indemnity insurance does not have any restrictions on networks. You are free to see any doctor you like. The benefit amount is normally paid to you directly by the hospital indemnity insurance companies, which explains why.

FAQs

How does hospital indemnity insurance work?

Your hospital indemnity insurance plan has monthly premiums that you must pay. Your hospital indemnity plan pays you in cash if you are admitted to the hospital due to a sickness or injury.

You can use these emergency funds to cover costs not covered by your health insurance, deductibles, copays, and coinsurance, childcare fees while you are in the hospital, or cost-of-living expenses while you recuperate. The payments will be made directly to you.

There are often no deductibles and no provider network restrictions with these plans.

How Much Does Hospital Indemnity Insurance Cost?

Hospital indemnity insurance, according to Cigna, can begin at roughly $10 per month for single coverage. If you have coverage from your work as part of its benefits package, you can pay a lot less.

Costs are determined by a number of variables, such as your age, location, insurance provider, coverage level, and deductible (if applicable), much like with most insurance plans.

An employer-sponsored medical indemnity insurance policy may cost significantly less. Through companies, Protective provides insurance that range in price from $2 to $18 per month for hospitalization coverage that pays $100 per day. Less than $5 is paid each month by those under 50.

Is pregnancy covered under hospital indemnity?

In general, this coverage provides monetary benefits for hospital stays caused by disease, accidents, or surgery. Additionally, certain employers may provide coverage for hospital stays related to pregnancy.

Is hospital indemnity insurance tax-deductible?

Individual taxpayers who obtain hospital indemnity insurance for personal use are generally not able to deduct the premiums. This type of insurance pays a fixed cash payment for each day you are hospitalized.