If you were a medieval traveler in, say, 1300 or so, you’d spend many a night searching for a hospital. Would you be seeking treatment for the Black Plague? A jousting injury? Perhaps leprosy, one of the period’s most-feared diseases?
Actually, your quest wouldn’t be nearly so dramatic: In the Middle Ages, a hospital was a hotel or hostel where pilgrims could rest their weary heads. The word “hospital” wasn’t defined as a place for medical care until around 1600, when modern treatment plans included using leeches for bloodletting and hot irons to cure hemorrhoids. Here’s another sobering set of facts:
Doctors in the Middle Ages billed on a sliding scale, depending on the patient’s wealth and status. While a nobleman might pay 10 livres, a king would pay 10 times that amount. Today, costs vary by country: In 2012, a one-day stay in a U.S. hospital averaged $4,287. In France, the average was $853; in Argentina, $429. Expenses also differ by treatment. A hip replacement in the United States cost an average of $40,364 in 2012. The tab for the same treatment in the United Kingdom was $11,889.1
Health care costs: almost scary as being sick
Today’s hospital costs are enough to make you sick – or sicker, if you’re the one receiving treatment. Most people’s stomachs do flips when they open their mailboxes to find their final invoices lurking inside.
It’s no surprise that hospital bills are so scary when you consider that many families are living paycheck to paycheck. Americans’ track record when it comes to saving money isn’t exactly stellar: Half of all households are “financially fragile.”2 Results from the 2013 Aflac WorkForces Report3 confirmed many are teetering on the edge when it comes to savings, and one major illness or injury could send them tumbling over the financial precipice. According to the report:
24 percent of workers completely agree or strongly agree they will be financially prepared in the event of an unexpected emergency or serious illness.
46 percent of employees have less than $1,000 on hand to pay out-of-pocket expenses associated with an unexpected serious illness or accident, and 25 percent have less than $500.
40 percent of workers would have to borrow from their 401(k)s, friends or family to pay out-of-pocket costs stemming from an unexpected serious illness or accident, while 28 percent would have to pay by credit card.
A prescription for fighting back
One tool some Americans use in their efforts to cope with mounting health care costs is hospital indemnity insurance. This type of voluntary coverage helps with out-of-pocket costs associated with serious accidents or illnesses. If you, as a policyholder, are hospitalized, you’ll receive cash benefits that can be used to help cover daily-living expenses, including the mortgage or rent, utility bills, groceries, credit cards, child care and other necessities.
These plans provide predetermined hospital benefits that are paid even if you have other insurance coverage in place, such as a major medical policy. It’s important to note that some hospital indemnity plans offer only hospitalization benefits, while others also cover diagnostic procedures, outpatient surgery and travel by ambulance.
The voice of experience
Often, someone who’s experienced the benefits of a product first-hand provides the most compelling evidence of its value. Daniel, who purchased a voluntary hospital indemnity policy through his employer before experiencing a collapsed lung, had this to say:
“I was told that I would need surgery to correct my lung as it was the second time the lung collapsed. Since I’d only been employed for 8 months, I was not covered by FMLA and had not accrued enough vacation or sick time to cover the 2.5 weeks I would be recovering. That meant I would receive zero pay from my employer while I was sitting at home. I live paycheck to paycheck, so this was not something I was looking forward to.
“Just when I thought I was going to fall behind on my rent and other bills, my insurance agents came to the rescue. The benefits check helped me to pay my rent, my other bills and pay off a portion of my huge deductible at the hospital. I will always keep my policy active because it really pulled me through during my time of need.”
People like Daniel who sign up for hospital indemnity insurance coverage can focus less on the prospect of frightening health care costs and more on something really scary – like the creepy goings on at the most haunted hospital in America, Waverly Hills Sanatorium in Louisville, Ky. Visitors who check in at the former tuberculosis hospital are greeted by glowing orbs, shadowy movements and unseen whisperers warning them to “go away.”
1International Federation of Health Plans 2012 Comparative Price Report, accessed Jan. 14, 2014 - http://static.squarespace.com/static/518a3cfee4b0a77d03a62c98/t/51dfd9f9e4b0d1d8067dcde2/1373624825901/2012%20iFHP%20Price%20Report%20FINAL%20April%203.pdf
2Financially Fragile Households: Evidence and Implications, National Bureau of Economic Research Working Paper 17072, accessed Jan. 15, 2014 - http://www.brookings.edu/~/media/projects/bpea/spring%202011/2011a_bpea_lusardi.pdf
3The 2013 Aflac WorkForces Report, accessed Jan. 15, 2014 - www.aflacworkforcesreport.com
This article is for informational purposes only and is not intended to be a solicitation.