Hospital Indemnity Insurance: What It Is and Why It Matters

Common Questions for Hospital Indemnity Plans

We hear a lot of questions from our customers who are exploring supplemental Medicare coverage. Here are the top FAQs we get about hospital indemnity plans:

What is hospital indemnity insurance, and how does it work with Medicare?

Hospital indemnity insurance pays a daily cash benefit while you’re hospitalized. These payments are made directly to you, allowing flexibility in how the money is used. This coverage is especially useful in covering costs that Original Medicare or Medicare Advantage plans don’t fully pay, like hospital copays, transportation, or other out-of-pocket expenses.

Why would I need hospital indemnity insurance if I already have a Medicare or Medicare Advantage Plan?

Even with Medicare or Medicare Advantage, you can still face significant costs during a hospital stay. Daily copays, deductibles, and non-covered services can quickly add up. A hospital indemnity plan helps cover these gaps, reducing financial stress during a difficult time.

How much does the hospital indemnity plan cost?

The cost of coverage depends on your age, the benefit amount, and the plan you choose. On average, premiums are affordable. For example, a 65-year-old woman may pay as little as $16 per month for a plan that pays $250 per day for a 7-day hospitalization.

What does hospital indemnity insurance cover?

Hospital admissions and daily confinement

Intensive care unit stays

Outpatient surgeries

Emergency room visits

Ambulance services

Rehabilitation and therapy

Some plans also offer additional benefits for wellness visits or specific illnesses.

Can I use the benefits from hospital indemnity insurance for non-medical expenses?

Yes. Since benefits are paid directly to you, you’re free to use the funds however you need, whether that’s paying your mortgage, buying groceries, or covering childcare while you recover.

Do I need to undergo a medical exam to enroll in hospital indemnity insurance?

Most hospital indemnity insurance plans are guaranteed issue. That means there’s no medical exam required, and you’re approved if you meet the basic eligibility guidelines.

Is hospital indemnity insurance worth it?

If you’re concerned about the cost of hospitalization, indemnity health insurance provides peace of mind and financial support. It can be especially valuable for those enrolled in Medicare Advantage plans with higher daily hospital reimbursements.

Does hospital indemnity insurance cover outpatient services or surgeries?

Many hospital indemnity plans offer optional add-ons(riders) for outpatient care, surgeries, or diagnostic testing. Be sure to review each policy’s details to ensure it fits your needs.