Hospital Indemnity plans
If you are a Medicare agent, it is a good idea to consider adding hospital indemnity plans to your product offerings. In the event someone becomes ill and is hospitalized, these plans provide clients an additional layer of coverage. Hospital Indemnity insurance provides policyholders a chance to protect their savings and lower their out-of-pocket costs.
It is important to note; when it comes to hospitalization, there are limits to what Medicare Advantage or Medicare supplement plans cover. When that happens, a hospital indemnity plan can provide an extra peace of mind for beneficiaries.
What is hospital indemnity insurance
Hospital indemnity insurance is additional health coverage that individuals can purchase and add an extra layer of protection. These plans have a monthly premium like other insurance coverage. If the beneficiary has to stay in the hospital, they receive a fixed payment amount they can use to cover any out-of-pocket costs members incur. Beneficiaries can use the payment to cover whatever they need such as, deductibles, co-pays, medication or for things like rehabilitation or home care expenses.
Unlike other insurance plans, hospital indemnity policies send payments directly to the policyholder. This gives beneficiaries more freedom to choose where their money goes. A good hospital indemnity plan should be easy to get, has no deductible or pre-certification and is not difficult to get payments from when you need them.
What hospital indemnity insurance covers
The coverage provided by a hospital indemnity plan depends on the plan chosen and the riders added. We have listed a few basic things these plans cover below.
- When a beneficiary has a hospital stays weather or not surgery takes place.
- If they are confined in an ICU (intensive care unit).
- In the event they are confined in a CCU (critical care unit).
Additionally, there are plans that offer coverage of all or some of the items listed below.
- If a beneficiary has medically necessary outpatient surgery , as opposed to an elective outpatient surgery.
- If they require outpatient diagnostic imaging procedures, x-rays or lab procedures.
- Some plans include payments for ambulance services.
- There are plans that event pay for emergency room visits or specific doctors office visits (not routine annual checkups).
Waiting periods for benefits
In most cases, there is a 30 day waiting period for illnesses that result in a hospital stay. The waiting period varies by carrier and the plan chosen. However, some plans will not have a waiting period for hospitalization for an accidental injury. It is important that enrollees understand all benefits of their plan choice, including waiting periods, before they decide on a policy.
Hospital Indemnity plan cost
Hospital indemnity plans charge a monthly premium like any other health insurance. The cost depends on several factors including the plan & company choice, as well as age, gender and location.
It is important to consider if hospital indemnity insurance is worth getting or not. The beneficiary needs to consider what their current health plan covers, their out-of-pocket cost including deductibles and co-pays and co-insurance and the cost for an average hospital stay. They also have to take into account their personal financial situation and if they can better afford the coverage or payment for the out-of-pocket expenses.
Opportunity for cross sales
Hospital indemnity plans provide a great opportunity for Medicare agents to make a cross sale. Many of your current clients could benefit by purchasing one of these plans. Clients who enroll in a Medicare advantage plan without a premium ($0) may want to add an affordable hospital indemnity plan that adds that extra layer of protection. Their Medicare advantage plan may leave them paying high co-pays or deductible for a hospitalization. Be sure to go over their budget and possible value of adding the coverage.
Agents should go over the average cost of a hospital stay and the possible out-of-pocket cost as compared to the cost of adding a hospital indemnity plan. Do the Math for them. Make sure it is a viable option before they sign up.
Are you an agent who wants to offer these plan to your clients; click here for online contracting.
Rules for hospital indemnity insurance sales
It is important to remember, there are rules to follow when you offer a hospital indemnity plan to a client. Agents cannot mention this or any other product at a Medicare appointment if it is not included on the scope of appointment.