Hospital Indemnity Coverage: Is It for You?
You may be hearing more about hospital indemnity insurance these days. As affordability of health insurance continues to be a challenge in the marketplace, insurers are delivering creative solutions to fill the coverage gaps for Medicare beneficiaries.
Hospital indemnity plans are an example of one solution gaining traction.
What Is Hospital Indemnity Coverage?
A hospital indemnity plan is supplemental insurance that pays a fixed dollar amount when you’re confined in a hospital, regardless of what other medical insurance you may have.
What Does Hospital Indemnity Insurance Cover?
Hospital indemnity typically is used for hospital admittance, but because it’s paid directly to you versus the provider, you can use it however needed.
It can be used for:
- Hospital stays
- Observation unit benefits
- Emergency room charges
- Transportation
- Inpatient mental care
- Therapy and rehabilitation
- Groceries
- Lodging
Whether you want to use the funds to pay a hospital bill or pay your car insurance, it’s totally up to you.
How Much Do Hospital Indemnity Premiums Cost?
Hospital indemnity plans are designed to be affordable, so premiums can be relatively inexpensive. Prices vary depending on a variety of factors, from your age to the amount of coverage.
When you consider that the average cost of a three-day hospital stay is $30,000, hospital indemnity can be an affordable option to help you avoid massive medical debt. Hospital indemnity plans are lower-premium plans that can reduce your out-of-pocket exposure.
With the Centers for Medicare and Medicaid Services estimating that Medicare costs will go up more than usual in 2026, pairing a hospital indemnity plan with a Medicare Supplement (Med Supp) or Medicare Advantage health insurance plan may be a suitable solution for some consumers. One combination gaining popularity is a high-deductible Med Supp Plan G with a hospital indemnity plan to keep premiums affordable, while allowing clients the flexibility to choose who they see for health care needs. It’s important to understand the benefits of the different Med Supp plans when considering your coverage.
Underwriting, Limitations and More
Underwriting with hospital indemnity insurance typically is simplified, meaning the number of medical questions you have to answer in the application process is limited.
Also, hospital indemnity plans may have a six- or 12-month preexisting condition limitation and a two-year contestability period. This means if a covered individual has a preexisting condition, benefits may be limited or excluded for a certain period after the policy’s effective date, and the insurer can contest the policy if they discover misrepresentations within the first two years of coverage.
See If Hospital Indemnity Insurance Is for You
To learn more about hospital indemnity, contact your Licensed Insurance Agent at Insuractive®.