Hospital indemnity insurance, sometimes called the hospital to pay out insurance, is a secondary insurance policy designed to cover the expenses of hospital admission which might not be covered either by other health insurance or another policy. The policy covers only employees who have been admitted to a hospital for a pre-existing covered illness or injury. And it applies to employers with as few as two employees. The policies differ from one company to the next. And some of them can be bought outside of the network, through independent suppliers, or by contacting the hospitals directly.
Hospital indemnity insurance plan
When purchasing a hospital indemnity insurance plan you need to know what kind of coverage applies to your job and your particular job. It pays to have a broader understanding of your job and the tasks you perform. You also must decide how much you can afford to spend on this particular type of health insurance policy. While there are generally no deductibles associated with these policies, some do have a co-payment option that could apply if you are prone to specific medical problems.
A standard hospital indemnity insurance policy pays 80 percent of the total medical costs for patients who ordinarily receive hospital care when you are not treating them. The policy can also pay up to two-thirds of the cost of one day of in-patient treatment and any overnight stays. Generally, the deductibles and co-payments will vary from insurer to insurer. A typical premium for a two-day stay in a hospital for a serious condition could be several hundred dollars.
If you already have a PPO health insurance policy or an HMO health insurance policy that limits the number of doctors you can see, you may choose hospital indemnity plans that limit the number of hospital visits you can make as well.
In most cases, you are allowed to make one single hospital visit within a twelve-month period. If you need more than one day's hospital time due to complications caused by a severe illness or severe injury, however, you are not eligible to make more than two hospital visits within a year. Some insurance companies have a lifetime limit on the number of hospital visits. These policies are usually very costly and are usually restricted to the most severe health conditions.
One other type of hospital indemnity insurance covers catastrophic claims only. If your unexpected major medical expense is covered by a limited version of this policy, it will only pay the deductible. So even though you might pay the deductible, the insurance company still doesn't pay the rest of your expenses. This kind of policy is often less expensive than a traditional health insurance policy and often allows you to choose between a high deductible and a low deductible in order to customize your policy to your needs.
Finally, there is what is called a catastrophic plan, which has a deductible and pays most, if not all, of your medical expenses up to a maximum of $1 million per occurrence. For most people, this level of coverage would be required if they needed to get hospital care for a serious illness or for a debilitating injury, but it isn't for everyone. Catastrophic coverage may help cover a person's funeral expenses, but it won't cover much else. So this kind of hospital indemnity insurance isn't really necessary for people who aren't at risk for a serious illness or injury.
The other option is a type of disability coverage. Disability insurance pays benefits when you are unable to work because of injury or illness. In most cases, disability coverage will also pay benefits if you are unable to work because of pregnancy. Again, if you are pregnant, you need to speak with an agent to determine the best course of action for your particular situation. Pregnancy can also affect a person's ability to work, so disability insurance isn't necessarily required during pregnancy. Again, though, it may help to cover the cost of maternity leave or other benefits that might be available through your employer.
There are many other options to hospital indemnity insurance, including catastrophic and flexible policies that have different ways to set deductibles and co-payments. Different plans will also have different ways to define "minor" medical emergencies and how those emergencies are defined. It's important to talk with an agent to determine the best plan that will meet your needs.