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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.

1. When a beneficiary has a hospital stays weather or not surgery takes place.
2. If they are confined in an ICU (intensive care unit).
3. 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.

1. If a beneficiary has medically necessary outpatient surgery , as opposed to an elective outpatient surgery.
2. If they require outpatient diagnostic imaging procedures, x-rays or lab procedures.
3. Some plans include payments for ambulance services.
4. 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.

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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.

Watch a YouTube video on the scope of appointment rules.

How Does Hospital Indemnity Insurance Work?

No one wants to end up in the hospital. Despite hospitals being a healthcare hub full of solutions for most ailments that people experience, most of us avoid going to them at all costs. This is often due to the fact that it can be prohibitively expensive to access hospital services, particularly if people have little to no insurance. However, hospital indemnity insurance is one solution to this problem.

What is Indemnity Insurance?

One of the most common forms of insurance, including hospitalization insurance, is called indemnity insurance. Indemnity insurance is also called fee-for-service. Policyholders can use any doctor or hospital, they are not confined to a network. Either the beneficiary or the service provider sends the bill to the insurance company, who then reimburses the holder or the provider. Typically, there is a deductible that the beneficiary must meet before the insurance starts to kick in. Then, the insurer usually pays a certain percentage of the “usual and customary” costs from the services. This percentage is usually around 80%, and usual and customary fees are healthcare field standards for what something usually costs. These indemnity plans may not pay for preventative care.

Hospital Indemnity Insurance

Now, hospital indemnity insurance functions as most indemnity insurance policies do. It is a supplemental insurance plan that is supposed to pay for the hospital admissions costs that are not covered by other standard policies. Because the majority of Americans do not have the savings to cover unplanned medical bills, this can be a very useful financial safety net if someone is admitted to the hospital or the ICU due to injury or illness. The payments from the insurance company can be used to cover any of the costs associated with the hospital admission, including copays, deductibles, and even food, rent, or other bills.

There are also guaranteed issue policies that require no disclosure of medical history in order to enroll. One of the major differences between standard insurance policies and indemnity policies is to whom the payments are made. Indemnity insurance policies for hospitalization make payments directly to the hospitalized person, the policy holder, rather than the hospital. This allows for much more flexibility as to where the money goes and how it is used.

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What is Indemnity Insurance

There is a lot of jargon, or context-specific, language surrounding insurance. As a result, those who are in the field often use language without thinking that can require definitions for their clients. One of the terms that keeps popping up in the health and medical insurance industry lately is indemnity insurance. What is Indemnity Insurance?

How it Works

As a general rule, indemnity insurance is the most traditional form of insurance. Although it used to be a very common form of insurance, it is no longer common. Indemnity health insurance is fee-for-service insurance. This means that beneficiaries have a greater range of choice in their doctors, hospitals, and medical centers. They can choose to change doctors at any point, without referrals. The insurance policy pays their share of the cost of service after they receive a bill for that service.

Like other modern insurance plans, once the beneficiary meets their deductible, the insurance policy pays for their share of the cost of service. Typically, this is 80% of the service, as long as the service is “usual and customary.” If the service costs more than the “usual and customary” amount, then the beneficiary is responsible for the copay and the difference in costs. Indemnity insurance policies sometimes do not pay for preventative care, but will cover medical tests and prescriptions.

Because this is a fee-for-service plan, beneficiaries often have to file claims in order to receive their insurance policy’s share of the service as well as save receipts for prescription costs and other purchases.

How to Get an Indemnity Policy in Connecticut

Although they are not as common as they used to be, indemnity insurance policies are still available in Connecticut under some larger insurance carriers. Some of the most recognizable names that provide indemnity insurance health and medical policies are Aetna U.S. Healthcare, Guardian Life Insurance Company of America, New England Life Insurance Company, and United Healthcare Insurance Company.

Licensed agents – What is Indemnity Insurance?

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