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What’s a Hospital Indemnity Plan and is it Right for You?
Hospitalization insurance plans generally provide benefits for medical services associated with being hospitalized due to an injury or illness.
You may also be able to obtain additional coverage for outpatient services like preventive care, urgent care, outpatient services, and diagnostics like X-rays and lab tests or for certain critical illnesses.
Hospital room and board
Inpatient physician’s visits
Inpatient prescription medications
Pre-existing conditions, including pregnancy
Preventive care such as routine physicals
Any non-medically necessary surgical procedures
Outpatient prescription medications
Also known as hospital insurance or hospitalization insurance, this type of indemnity plan typically provides a “fixed” or set benefit amount for costs you may incur when you are hospitalized due to an injury or condition covered by your policy.
Hospital insurance is not available in every state. In some states, you are required to have an Affordable Care Act (ACA)-compliant major medical plan before you can enroll in a hospital insurance plan.
Your hospital indemnity insurance premiums are impacted by factors such as:
In general, premiums for this type of plan may be lower than ACA plan premiums because hospitalization insurance plans offer less coverage than ACA plans.
When you are hospitalized due to an injury or illness, hospital indemnity insurance may provide benefits for the following types of medical services:
If you combine your hospital insurance plan with critical illness coverage or select a hospitalization insurance plan, which includes that type of coverage, your insurance may also provide benefits for medical services related to hospitalization for conditions such as:
You may also have the option to customize your hospital insurance policy, and select benefits to provide coverage for outpatient services such as preventive care, urgent care and diagnostic services (X-rays and lab tests). Remember, you must read any policy you’re considering carefully to understand what is covered and what is excluded. The above lists are only examples.
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Typically coverage is not limited to a network of doctors and hospitals. This also means that the plan benefits are paid at a fixed amount, so your insurer has not negotiated any limits on what you are charged for in-patient services.
If you are hospitalized, your policy pays a set benefit amount for eligible services regardless of how much your provider charges for the services. The amount paid is per day, per week, per month, per visit or per event, as outlined in the policy you select.
Here’s an example of how hospital indemnity insurance works:
The hospitalization insurance plan you selected pays $250 per day for hospital room and board charges, and $100 per day for inpatient doctor visits. If you are hospitalized for three days due to an injury or medical condition covered under your plan and you are visited each of those days by a doctor in the hospital, you will receive $1,050 in benefits.
Be sure to carefully review your policy for more specific details about what benefits will be paid for eligible hospitalization charges you incur.
You may choose to receive your benefit payments directly, or you may ask your insurer to pay the benefit amount to your provider.
Hospital indemnity benefits typically do not coordinate with any other health insurance coverage you may have, like major medical. That means that no matter what your major medical policy pays for a covered illness, injury or healthcare service, the hospital plan will pay its fixed indemnity benefit as indicated in your policy.
No, you have the flexibility to use your benefit payments in any way you choose, whether it’s to cover costs of your medical treatment or for other expenses like housing, transportation, groceries or childcare.
Some policies have no yearly or lifetime limit while others do include limits.
Generally, as long as you continue to pay your monthly premium, you will receive a fixed benefit amount for any eligible expenses you incur. Check any policy you are considering for full details.
There is no annual enrollment period for hospital insurance, so you may apply for coverage at any time. The application process can take just a few minutes to complete, and if you are approved for coverage, your policy can take effect as soon as you pay your first premium.
Get an instant hospital insurance quote to compare different plan options that may meet your needs.