Compare Hospital Indemnity Insurance and Health Benefit Plans

What is a health benefit indemnity insurance plan?

Health benefit indemnity insurance plans are hospital indemnity health insurance plans that pay a set amount of money when you receive covered medical services. It’s cash you can use to help cover medical expenses or lost income when a healthcare emergency or illness strikes. Since the money is paid directly to you, it can also be used to pay bills like the mortgage, childcare or whatever you need dollars to cover your expenses. Also known as fixed indemnity health insurance or an indemnity medical plan, health benefit indemnity insurance is best used as a supplement to a major medical health plan. Alongside financial coverage, these low-cost plans also include non-insurance healthcare services like telemedicine access and prescription drug discounts to help fill gaps in coverage. Many purchasers of a fixed indemnity health insurance plan comment that the primary values of the plans are the flexibility to use the plan payouts without restrictions. The benefit can be used to pay your deductible or to help cover lost wages while you were ill. You choose how to use it.

How is hospital indemnity insurance different than a short-term health plan?

Health benefit indemnity insurance plans work differently than the short-term or Obamacare health plans most consumers are familiar with. Health benefit indemnity insurance plans mostly offer first-dollar benefits. That means there are no deductibles, coinsurance or copays that are required to be paid out of pocket before the insurance company begins paying for medical services. The insurance carrier begins paying right away for your first service, allowing you to avoid dipping into checking or savings accounts for healthcare related expenses. Depending on the health benefit indemnity insurance plan, fixed payments may be made directly to the insured to offset out-of-pocket expenses or lost income, or payments may be paid directly to the insured’s health care provider if they so choose.

If you have questions comparing plans, you should speak with a licensed health insurance agent by calling 800-821-3054.

How do I choose a health benefit indemnity insurance plan?

Like all forms of insurance, you should shop for healthcare coverage based on your medical needs, the plan’s benefits plus monthly premium and cost sharing requirements. The key plan benefits for health benefit indemnity insurance plans which include hospital and emergency care services are:

• Sickness coverage: With a health benefit indemnity insurance plan you get paid a cash amount for a set number of doctor office visits for each coverage period.
• Accidental injury coverage: Review what the plan pays for accidents resulting in an injury that requires medical care in a hospital or through ground transportation to the emergency room.
• Critical illness coverage: Research what the coverage will pay upon the diagnosis of a covered critical condition such as a new cancer diagnosis or a heart attack.
• Telemedicine: Does the plan provide 24-hour a day access to healthcare providers by phone or the internet? Many hospital indemnity plans do, and the service can save you even more money than accessing your benefits through the insurance plan - all from the comfort of your home.
• Pharmaceutical discounts: Does the plan provide discounts on the retail price of medications? Is there a network of participating pharmacies in your local area? If you take general maintenance drugs, especially generic drugs, you might want to save a few extra dollars using an Rx discount drug program.

If you have questions about whether a health benefit indemnity insurance plan is right for your current situation, you can speak with a licensed health insurance agent by calling 800-821-3054.

Candidates for health benefit indemnity insurance plans

Since health benefit indemnity insurance plans like our fixed indemnity health insurance coverage do not have a deductible or coinsurance, you get immediate relief from medical related expenses beginning day one. If your doctor or facility charges more than the fixed amount the insurance pays, you are responsible for the remainder of the bill, but many times it is less than paying full retail for the medical service (knowing the services will also be repriced at a lower rate since you have insurance).

Understanding that you get financial relief from medical bills makes health benefit indemnity insurance plans well-suited for individuals and families who have lower income or don’t have a large amount in savings for a rainy day. According to Bankrate, only 40% of Americans have $1,000 saved to pay a surprise medical bill. In fact, medical bankruptcy is the root cause of 66.5% of all bankruptcies each year. That means about 530,000 Americans file for medical bankruptcy during the course of 12-months - a staggering number considering the stressful circumstances that lead people to the outcome.

So who are good candidates for fixed hospital indemnity plans who could benefit from extra financial protection? Some examples of individuals who might want to consider fixed indemnity plans include:

• Someone with a higher deductible on their health plan
• Someone looking for the flexibility of direct payments for benefits
• Individuals with a pre-existing condition who have an Obamacare Bronze plan (the lowest-cost plan available) and want extra protection for additional expenses they might incur at the doctor’s office or at the hospital

What are considered “hospital benefits” and what do they cover?

Hospital indemnity insurance plans are given that title because they cover more hospital benefits for sudden emergencies compared to a lot of doctor office visits, therapies, mental health and other “outpatient” services that can be for ongoing maintenance. Hospital plans are meant to provide financial relief for high-end charges that can be part of an in-patient hospital stay. Benefits can include fixed payments for services such as:

• Hospitalization coverage: This is a primary benefit of hospital indemnity plans. If you suffer an in-patient hospital stay, the plan pays a set dollar amount for the covered service no matter what you are in the hospital for (pre-existing conditions are not covered during the first 12 months but sudden injuries or new illnesses qualify).
• Emergency room coverage: Whether or not you need to check in to the hospital, there is a high chance you will probably start in the ER. Approximately 42.2 million people went to the ER in 2016. Hospital indemnity insurance considers this a hospital expense and covers the charge with a flat dollar amount on most plan levels (but check to see if it’s a covered benefit based on the tier level you purchase).
• ICU room coverage: While you never want to end up in critical condition in the ICU, life can, on occasion, take a turn. Since this is considered a hospital expense, fixed indemnity health insurance pays a set dollar amount for ICU stays up to a set number of days (but check to see if it’s a covered benefit based on the tier level you purchase).
• Ground or air ambulance coverage: Transportation to a hospital, either by land or air, is considered a hospital expense and is typically covered under most hospital indemnity plans (but check to see if it’s a covered benefit based on the tier level you purchase). If the benefit is covered there is usually a limit to one transportation ride per policy period.
• Inpatient and outpatient surgery coverage: Surgery is a big part of any hospital stay. For example, about 250,000 people have an appendectomy every year, a fairly common surgery that removes a diseased appendix. But the surgery costs thousands of dollars. With hospital indemnity insurance, a flat amount of cash is paid to help mitigate their exposure to a high medical bill.
• Inpatient and outpatient anesthesia coverage: Anesthesia can result in a huge “surprise bill” from a hospital if you have traditional, permanent health insurance. Many times people find that even if they go to an in-network hospital and see an in-network surgeon, the anesthesiologist can be out of network, prompting a huge surprise bill for out of network services. The fixed rate is the same no matter where you receive medical care since there is no network.
• Advanced diagnostic, X-rays and laboratory testing: Whether you have testing done during an in-hospital confinement or shop for a lower cost outpatient imaging center, X-rays and labs are considered a necessary hospital expense and have a fixed dollar amount built in as part of this indemnity insurance coverage.

Other benefits included in most fixed indemnity health insurance plans are a set number of doctor office visits per coverage period and on some plans, a one-time wellness office check.

Get cost estimate before going into the hospital or getting that test

When considering a health benefit indemnity insurance plan, it would be wise to get a better understanding of how much medical services cost when you have a hospital stay or want to see a doctor for an illness. Websites like Fair Health Consumer give estimates based on location and medical treatment.

Open provider network gives you freedom to see any doctor

A final advantage of health benefit plans is the lack of network requirements. When you have an open, all-access arrangement, you are not tied to a network of contracted doctors. If you live in a rural area, this can be extremely helpful and save you from driving more than an hour to a metropolitan city for medical care. With the fixed dollar amount per service system of a hospital indemnity plan, you get to use the money to pay medical bills or other bills that you’ve incurred due to sickness or injury. The money is yours to keep and use as you see fit.

Health benefit indemnity insurance plans are not for everyone and don’t include the 10 essential health benefits that are required for Obamacare plans.