Hospital visits can cost a lot of money. A broken leg can cost up to $7,500. A three-day hospital stay is around $30,000. Cancer treatment can cost hundreds of thousands of dollars.
Yes, medical insurance will help a great deal, but deductibles, co-pays and out of pocket expenses can still be significant.
Consumers have an insurance product that can help with these expenses – hospital indemnity. It helps pay for costs of hospital admission, ambulance transportation, emergency room visits, intensive care stays and more.
“Unfortunately, health insurance doesn’t guarantee financial security,” said Simon Milazzo, hospital indemnity product manager for Unum. “Additional coverage like hospital indemnity can provide a safety net against high medical bills associated with an unexpected hospital stay.”
Even for people who are confident in their savings, hospital indemnity protects their finances right now – so they have something left for the future.
So how does it work? Here’s an example, using a 30-year-old woman who just had emergency gallbladder surgery with complications that resulted in a five-day hospital stay. Even with medical coverage, she may incur significant out-of-pocket expenses, including:
- $100 emergency room co-pay
- $1,000 deductible
- $1,000 co-insurance for surgery ($5,000 x 20%)
- $2,000 for hospital stay ($10,000 x 20%)
For illustration, a lump sum hospital indemnity policy may pay these benefits:
- $150 emergency room visit
- $1,500 hospital admission benefit
- $500 diagnostic procedure benefit
- $1,000 inpatient surgical procedure benefit
- $500 daily hospital confinement benefit ($100 x five days)
Hospital indemnity insurance can work as a complement to any core medical plan. The cost of this coverage will vary. Coverage may be as little as $5 per month or considerably higher, depending on your age and features of the plan.
Many hospital indemnity products also come with a wellness benefit – an annual payment of $50, $75 or $100, if you complete a qualified health exam like a pap smear, mammogram, prostate screening or cholesterol check. This can help offset the cost of the coverage while also promoting early detection of potentially serious health conditions.
“A recent study said 63% of people have no emergency savings for unforeseen events like a trip to the emergency room,” Milazzo said. “Hospital indemnity insurance helps fill those financial gaps that people will have to manage, even if they have robust medical coverage in place.”