An insurance plan for hospitalization due to an injury or critical illness
Are you prepared to pay around $10,400 out of pocket for a 4-to 5-day hospital stay?
The average cost of hospitalization can easily exceed the average major medical deductible amount of $4,328 (2017).
Are you able to pay a $4,000 medical bill in order to reach your deductible and access your major medical plan benefits?
Whether as a stand-alone alternative to major medical hospitalization benefits or to supplement a primary medical plan, a hospital indemnity plan with additional critical illness insurance benefits helps cover the costs associated with being admitted to the hospital when you become sick or injured.
Hospitalization insurance plans generally provide benefits for medical services associated with being hospitalized due to an injury.
Some plans include coverage for critical illnesses like cancer, heart attack, stroke, major organ transplant, coma, and kidney failure, while others allow you to add these coverages to your plan for an additional cost.
Because these plans are highly customizable, you may also be able to obtain additional coverage for outpatient services like preventive care and urgent care, and diagnostics (X-rays and lab tests).
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
Legal Disclaimer: The above list is not a complete list of hospital insurance coverages and exclusions and is intended only as an example.
Here are a few of the pros and cons to consider when you’re thinking about applying for a hospital indemnity + critical illness insurance plan.
May be guaranteed renewable – You won’t be singled out for a rate increase or cancellation based solely on changes to your health.
You choose how to use benefits payments – There is no restriction on how to use the money you receive.
Apply year-round – There is no official open enrollment period, and you can apply anytime.
Don’t pay for coverage you don’t need – Plans are highly customizable; you can choose from various health benefit levels.
Keep your doctor – No provider network limitations for fixed indemnity plans means you can visit your preferred healthcare provider.
Unlike ACA plans, premiums are based on age and health – The younger and healthier you are the lower your monthly premium, conversely, older and sicker individuals will pay more.
Pre-existing conditions are not covered
Not ACA-qualifying major medical coverage – Hospital indemnity insurance is a form of alternative coverage, not ACA-compliant major medical coverage.
Legal Disclaimer: The above list is not a complete list of pros and cons.
Hospital plans may be beneficial to people who:
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COBRA is not your only option for health insurance if you find yourself unemployed.
Losing your job qualifies you for a special enrollment period for major medical, and there are alternatives like short-term health (available year round) as well.
Part-Time Seasonal Workers or Contractors
What should you do if you don't get health insurance through your employer?
You may need to purchase major medical coverage on your own, or enroll in an alternative health plan.
Prefer Non-Obamacare Options
Can you buy health insurance that isn’t Obamacare? Yes.
It’s important to note that Obamacare alternatives are not comprehensive health plans and have less coverage than Obamacare plans.
Hospital insurance is a “fixed indemnity” plan, meaning you receive a set benefit amount regardless of amount charged for eligible medical expenses from your provider. Fixed indemnity benefits may be paid per day, per week, per month, per visit or per event.
For example, your plan may pay $500 per day for inpatient hospitalization (hospital room and board) and cover one doctor’s visit per day while hospitalized at a rate of $100 per visit. If you are hospitalized for 5 days and see the doctor one time each day, your fixed benefit payment amount will be $3,000 for these services.
You pay monthly premiums in order to maintain your hospital plan and receive fixed indemnity coverage for eligible medical expenses. You may or may not elect to have a deductible. The lower your deductible, the higher your monthly premium.
Present your insurance card when you receive medical care. Unless you assign your benefits elsewhere, the insurance company receives your bill and pays you a lump-sum benefit based on the covered services provided. See some more example scenarios and cost breakdowns.
Your hospital plan does not coordinate benefits with any other health insurance you carry. If you’re using a hospital plan alongside a major medical plan, your major medical plan also processes payments.
You will continue to receive fixed payments from your hospital plan for covered care at the specified interval, such as $500 per day. Unlike major medical policies there is no annual or lifetime limit. The benefits will continue to be paid for as long as you’re receiving covered services up to any specified maximum.
Hospital plan premiums vary depending on the benefit level selected.
Plans can range from $50 per month to over $400 depending on your age, health and the level of coverage and any additional benefits you opt for.
It’s important to read and understand the coverages and benefits included in any plans you’re considering in order to know if the plan makes sense for you and your budget.
 (2018). Hcup-us.ahrq.gov. Retrieved 8 August 2018, from https://www.hcup-us.ahrq.gov/reports/statbriefs/sb180-Hospitalizations-United-States-2012.pdf ; 4.5 days is the average length of hospitalization in the US in 2012.
 Pennza, A. (2018). Average Health Insurance Costs for 2017. Peoplekeep.com. Retrieved 9 August 2018, from https://www.peoplekeep.com/blog/affordable-care-act-policy-costs-up-in-2017
Insurance, U., & Writers, S. (2013). Understanding Hospital Indemnity Insurance - InsuranceQuotes.org. InsuranceQuotes.org. Retrieved 9 August 2018, from http://www.insurancequotes.org/health/understanding-hospital-indemnity-insurance/