Hospital Indemnity Plans
Is a Hospital Indemnity Plan right for you?
Hospital indemnity plans, also known as hospital and surgical health insurance plans, can be a temporary solution for individuals and families without a traditional health insurance plan as well as long-term supplemental coverage for those who do and want some extra benefits. This type of plan fixed payment amounts and lump-sum cash benefits for specific services and care. It is important to note that hospital indemnity does not cover catastrophic care and is not intended to be a replacement for major medical insurance.
What is a hospital indemnity plan?
Considered a supplemental insurance product, hospital indemnity plans provide first-dollar fixed benefits for medical expenses related to hospitalization, surgery and outpatient therapy services. That means the plan pays up to the stated benefit amount for a service without any additional copay, coinsurance or deductible; however, it is important to note that first-dollar benefits only kick in after the deductible, if there is one, has been met.
What benefits does this type of plan include?
This coverage typically includes hospital and surgical benefits, as well as the ability to bundle in additional options such as critical illness benefits. The plan pays the fixed benefits based on the coverage level you select.
These benefits may include:
- Inpatient services (paid per day) such as
- Inpatient hospital confinement
- Accident benefits
- Inpatient physician visits
- Inpatient ICU/CCU confinement
- Inpatient surgical services (paid per surgery)
- Outpatient surgical services (paid per surgery)
- Maternity (lump sum benefit)
- Ambulance (per trip)
- Chemotherapy and radiation (per treatment up to a lifetime maximum)
- Per injury or illness deductible
- Critical illness benefit
Again, hospital indemnity plans are not major medical insurance and do not include Obamacare essential health benefits. This type of coverage is not subject to provisions under the Affordable Care Act and does not fulfill the requirement that most Americans buy health insurance or face a tax penalty.
What does a hospital indemnity plan cost?
Hospital indemnity plan premiums tend to be relatively low compared with traditional full-coverage health insurance plan premiums. These plans are highly customizable, which allows you to select a design affordable for your household budget.
Plans like those offered by IHC allow consumers to choose any doctor or hospital in America but offer a network of discounted providers for those who seek additional savings on health care. No matter what the provider charges, the plan pays the fixed benefit amount selected.
Who is this type of coverage ideal for?
Securing a hospital indemnity insurance plan is another way to reduce medical bills and pick up where your medical insurance leaves off. If you anticipate needing hospital or surgical services, this type of plan can provide some financial relief at a budget-friendly rate.
This type of coverage might be the right fit if you are looking for additional financial assistance for unexpected hospitalization or surgery charges. Those who are in relatively good health, do not have a major medical plan and need to save money might consider this as a short-term safety net to assist with costs related to hospital or surgical services. Those who see a doctor regularly or take prescription drugs may find this coverage too limited.
Discussing your health care needs and the amount you can afford to pay for insurance with an agent, broker or carrier sales specialist can help you arrive at the best solution for your circumstances.
Are hospital indemnity plans still relevant in the age of Obamacare?
Absolutely. They offer additional financial protection on top of major medical insurance. Once you gather monthly premium quotes and have considered how you might use your health insurance in the upcoming year, consider the benefits included, the deductible you might select and any anticipated out-of-pocket costs. At a relatively small cost, a hospital indemnity plan may help you save more in the event you need hospital and surgical services.