If you’ve ever experienced an injury or medical event that required a hospital visit or stay, you are probably acutely aware of how expensive the bill can be even after major medical insurance. And the price tag just keeps rising as costs associated with inpatient hospital services increase and a greater share of deductibles and co-pays shift to individuals. In fact, the average facility price paid for a hospital stay was $14,662 in 2010, a 5.1 percent increase over 2009. The average out-of-pocket price of a hospital stay rose 10.7 percent from $632 in 2009 to $700 in 2010.
The high cost of hospital stays combined with the likelihood for any individual to require one in their lifetime, is driving a growing need for supplemental hospital indemnity insurance.
What is Hospital Indemnity Insurance?
An increasingly valuable benefit option for employees, voluntary hospital indemnity policies are one of many voluntary insurance plans available to help people cope with incremental out-of-pocket costs associated with serious accidents or illnesses — costs major medical insurance was never intended to cover. In the event of a hospitalization, participants receive cash benefits that is often used to help pay for daily living expenses, such as rent, gas, groceries, babysitting and other necessities, as determined by the policyholder. The hospitalization benefits are predetermined and paid regardless of any other insurance you have, and you have a choice of applying for basic to more robust supplemental hospitalization insurance. Some hospital indemnity plans only provide hospitalization benefits, other may also address diagnostic procedures, outpatient surgery and ambulance transportation.
These policies are also becoming highly popular as more employers implement consumer-driven plans, including high-deductible health plans and Health Savings Accounts (HSA’s), which shift more out-of-pocket costs onto workers.
Some features of a hospital confinement indemnity plan include:
Who Needs Hospital Indemnity Insurance?
- No deductibles or copayments
- A HSA-compatible policy is available
- No networks, so you can be treated at the hospital of your choice
- No precertification requirements
- You own the policy, even if you change jobs or retire, it stays with you
Generally speaking, everyone is susceptible to injuries or illnesses that require a hospital stay and therefore, are good candidates for applying for voluntary hospital indemnity insurance.
Anyone who is concerned about the cost of hospitalization and its potential impact on short-term or long-term finances should look into the option of voluntary hospital indemnity insurance.
November 2009, my daughter was playing in a basketball tournament in Kennedale. She fell to the ground, crying and screaming about her knee and how she couldn't move it. After several days, because this happened on the weekend, she was able to get in to see the doctor who took some fluid off her knee and gave her results – she had torn her ACL and Meniscus. She had to have surgery to reconstruct and repair that knee. That took a couple of months.
After her injury I called my Aflac agent and told her what had happened. She told me what claim form that I needed to send her for my Aflac hospital confinement indemnity insurance policy. Aflac sent me a benefit check about 5 days later, which really helped because after her surgery I took off a week to stay at home with her.
Being a single mother, I am limited on my funds. She is still going through physical therapy and Aflac has helped with some of the out-of-pocket expenses from her physical therapy.
Why do I Need Hospital Indemnity Insurance?
Even with the best major medical insurance, an entire hospital bill probably won’t be covered. And what about the things health insurance was never intended to cover, like transportation and meals for family members, help with child care or time away from work? Often it’s those unexpected expenses that add up quickly and force people to dip into savings or borrow. A hospital indemnity insurance policy is designed to provide cash benefits during a covered hospitalization.
However, only 30 percent of workers overall were enrolled in voluntary hospitalization insurance policies in 2012, according to the Aflac WorkForces Report.
This despite the fact that nearly half (46 percent) of workers say they are not at all/not very prepared to pay for out-of-pocket expenses associated with a serious illness or accident. If you’re like half of today’s workers and have less than $1,000 to pay for unexpected out-of-pocket expenses associated with a medical event, one visit to the hospital can wreak havoc on your finances. Policies such as, hospital indemnity plans can help alleviate the short-and long-term effects of inpatient hospital costs.
To learn more about how voluntary accident coverage can benefit you or your employees, visit http://www.aflac.com/hciplan.
To see how much an accident or illness can cost even if you or your employee has major medical insurance, go to Aflac.com/RealCost.
“Health Care Cost and Utilization Report 2010,” Health Care Cost Institute (HCCI), May 2012
“2012 Aflac WorkForces Report,” conducted by Research Now, January 2012
Aflac individual insurance coverage is underwritten by American Family Life Assurance Company of Columbus. Group insurance coverage is underwritten by Continental American Insurance Company (CAIC), a wholly-owned subsidiary of Aflac Incorporated. CAIC is not licensed to solicit business in New York, Guam, Puerto Rico, or the Virgin Islands. For groups sitused in California, group coverage is underwritten by Continental American Life Insurance Company. For Aflac individual insurance coverage in New York or Aflac coverage for groups sitused in New York, coverage is underwritten by American Family Life Assurance Company of New York.