The American Association for Retired Persons (AARP) defines a hospital indemnity plan as a supplemental medical insurance plan that may cover some hospital costs not covered by your regular insurance provider. With the average hospital stay costing more than many people’s annual salary, this type of health insurance helps fill in some of the gaps. Since the insurance provider issues a check to you directly, you can decide how to use the money.

Services Typically Covered Under a Hospital Indemnity Plan

Most supplemental hospital insurance plans pay a set daily amount, such as $100, based on the number of days you spent in the hospital. For example, you would receive a check for $500 after discharge from a five-day stay in the hospital from your insurance provider. The fixed daily amount is generally not related to the services you received while hospitalized. However, there are often restrictions on receiving benefits based on the type of facility where you received care.

Possible Exclusions

Your expenses for surgery at an outpatient clinic or a nursing home are not typically covered under this type of plan. Some plans exclude coverage for pre-existing conditions while others require an elimination period of a set number of days. In a policy with a three-day elimination period, your benefits would begin calculating at 12:01 a.m. on the fourth day. When choosing your benefits, keep in mind that the Centers for Disease Control and Prevention states that the average hospital stay is 4.8 days.

National Health Insurance Agencies Can Help You Find the Right Plan

We understand that it can be difficult enough to understand your regular health insurance plan, let alone supplemental plans. We encourage you to contact us to discuss your current healthcare needs. Alternatively, you may complete a free quote request form on our website and a member of our staff will reach out to you with the information you requested.