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Selling Hospital Indemnity Coverage To Medicare Clients

By  Senior Market Advisors  on March 2, 2017

Selling Hospital Indemnity Coverage To Medicare Clients

Now that AEP is well behind us, have you been speaking with clients about ancillary products? Selling hospital indemnity coverage is a good way to get back into meetings with clients. You can offer to check in and introduce them to ancillary products to build loyalty. You can sell these products to clients of any age at any time. Additionally, as long as you disclose it in the scope of appointment form, you can discuss hospital indemnity insurance during a Medicare Advantage meeting.  

Seniors and the Medicare eligible usually live on a very fixed budget. Therefore, a simple injury or emergency room visit can set them back financially for months. Some patients may not realize the costs of hospital stays, and may not realize that they are not covered under their current insurance plans.

What Is Hospital Indemnity?

Hospital indemnity coverage is a reasonable, cost-effective way to prevent sky-high costs in the event of hospital stays. It’s necessary because most health insurance plans, including Original Medicare, will not provide enough funds to cover elongated stays. However, hospital indemnity plans can provide returns worth hundreds of dollars per night spent in the hospital. The limit on the number of nights spent varies. All of this can cost the consumer as little as $12 per month, and most carriers will accept patients with preexisting conditions. Clients with $0-premium Medicare Advantage plans with high deductibles will most benefit from Hospital Indemnity plans. They can receive just the right amount of additional coverage for very little cost.

One important note about hospital indemnity is that there may be waiting periods for benefits used towards illnesses. However, accidental injuries usually do not include a waiting period.

Hospital Costs

The average cost for one day in a hospital varies both by U.S. state and by whether the hospital is for-profit, nonprofit, or government-owned. It typically ranges from $1500 – $3000 per day, and the average length of a hospital stay for the Medicare eligible and senior citizens is 5.5 days. As far as total costs go, let’s remember that those numbers are before additional services, drugs, and procedures.

Clients will need to make a claim after their hospital visit, then they will directly receive a check for the predetermined cash value (per hospital day). For example, if the copay for a daily hospital stay is $400, that amount is still due, but a patient may receive a check for $250 in the mail directly from their indemnity insurance carrier.

How It Works

Indemnity plans can include funds for laboratory and radiology tests, ambulance transportation, emergency room visits, outpatient surgeries, and even smaller expenses like hospital parking. Some plans even include post-hospital skilled nursing facilities, primary care doctor visits, and preventive care/wellness benefits. Patients will receive checks in the mail. Since it’s just a check, patients can use it however they want. They can use it to pay for their hospital services, or they can deposit it to replace lost income. Most plans send checks based on a predetermined cash value.

Spring is a great time to start selling hospital indemnity plans. Start by revisiting with clients and explaining what hospital indemnity means. Ancillary plans are an excellent way to fill in some of the gaps that your client’s plans may not cover.