Hospital Indemnity Insurance

What It Is

Hospital indemnity insurance is supplemental medical coverage that pays benefits if you are hospitalized, regardless of any other coverage you may have. The benefits are paid directly to you, rather than to your doctors or hospital, and you may choose to use the payments you receive from your policy to pay for these expenses; but the benefit payments are meant to help you fill gaps for things not paid by your medical insurance, such as deductibles and coinsurances. That said, the benefits from a hospital indemnity policy may also be used for other expenses you may have.

According to the Kaiser Family Foundation, the national average for a hospital stay is 4.5 days, at an average cost of $10,400 per day — that’s a total of $46,800. Medicare coverage helps, but it does have limits. You may still find yourself responsible for costs your insurance doesn’t cover, particularly in the event of a long hospital stay or one requiring specialized treatment.

What Medicare covers

Medicare-covered hospital services include: semi-private rooms, meals, general nursing, drugs as part of your inpatient treatment (including methadone to treat an opioid use disorder), and other hospital services and supplies as part of your inpatient treatmentInpatient hospital care includes care you get in: acute care hospitals, critical access hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities (limited to 190 days in a lifetime), long-term care hospitals, and inpatient care as part of a qualifying clinical research study.

If you also have Part B, it generally covers 80% of the Medicare-approved amount for doctor’s services you get while you’re in a hospital.

 What Medicare does not cover

Medicare doesn’t cover private-duty nursing, private room (unless medically necessary), television and phone in your room (if there’s a separate charge for these items), personal care items (like razors or slipper socks).

There may be services recommended by your doctor that Medicare doesn’t cover. If this happens, you may have to pay some or all of the costs.

You pay this:

  • $1,484 deductible for each benefit period.
  • Days 1–60: $0 coinsurance for each benefit period.
  • Days 61–90: $371 coinsurance per day of each benefit period.
  • Days 91 and beyond: $742 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime).
  • Beyond lifetime reserve days: All costs.

For example, a hospital stay of 3 days could cost $1,484. 63 days could cost $2,597, which is the deductible plus 3 days @371. 93 days could cost an additional $11,573.

Click here to download a PDF of this Guide.

I’m happy to offer a free consultation to answer your questions and help you get the coverage you need. Please call me at (434) 373-0051.