Hospital Indemnity and Why You Need It

Senior product specialist John Shin discusses hospital indemnity plans, and why they’re a good plan to have in your back pocket. One advantage of Medicare Advantage plans is that they usually have a lower (or no) copay than a Medicare supplement. (Click here for some of the differences between the two.) However, you will be responsible for copays and deductibles when you have a Medicare Advantage plan. Hospital copays are by far the most expensive, and a bit unpredictable. The length of time you spend in the hospital could vary, and so could how much you pay out-of-pocket.

What Is a Hospital Indemnity Plan?

Hospital Indemnity plans are very popular, especially among people who are over 65 and on Medicare. There are several reasons why. A relatively simple policy, these plans are widely known and widely accepted throughout the healthcare industry. They are designed to pay for things, such as copays and deductibles associated with a hospital stay. For example, if someone on Medicare has a Medicare Advantage plan, there is usually an inpatient copay. This is where you’re in the hospital, and your Medicare Advantage plan does not pay all of the hospital costs, resulting in a daily inpatient copay. These could run all over the board price-wise, but for this example we’ll say the average (daily) copay would be around $300. So, if you were in the hospital for 4 days at $300 a day, you would be responsible for paying the hospital $1,200.

What Are Your Options?

This is why it’s very common for folks to have a separate, stand-alone hospital indemnity plan. You can choose the amount of copay that you’d like the plan to cover (in this case $300), as well as the number of days you want the plan to pay. This could be 6 days or 10 days; the options vary plan by plan. Hospital indemnity plans are relatively inexpensive and easy to enroll in. Normally, the premium is around a dollar a day – sometimes a little more, sometimes a little less, depending on the particular insurance company.

We highly recommend you check these plans out, and let us know if we can help!

Make sure you are covered for all of your health needs! Don’t get caught paying out of pocket for a lengthy hospital stay. A hospital indemnity plan will help with your medical expenses.

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