What Does Hospital Indemnity Insurance Cover?

How hospital indemnity insurance works

Hospital indemnity insurance is a supplemental, limited-benefit policy. Instead of paying the hospital, it pays a fixed cash amount to you when you have a covered stay, commonly a set amount per day or per admission. The payment doesn't depend on your actual bill, and you can use it for anything.

What it typically covers

• Inpatient hospital admissions, often with a daily benefit for a set number of days
• On some plans, intensive care, observation stays, emergency room visits or ambulance rides
• On some plans, a benefit for a stay in a skilled nursing facility after a hospital stay

What it doesn't cover

• It doesn't replace major medical insurance or Medicare.
• It won't pay more than the fixed benefit, no matter how large the bill.
• Plans can exclude or limit certain conditions, including pre-existing conditions, and may have waiting periods.
• Outpatient care, doctor visits and prescriptions usually aren't covered unless the plan specifically includes them.

Who tends to consider it

• Medicare Advantage members whose plan charges a per-day hospital copay
• People with a high-deductible health plan
• Anyone who would struggle to cover bills while recovering

Questions to ask before you buy

• How much does it pay per day or per admission, and for how many days?
• Does it pay for observation stays or only inpatient admissions?
• Is there a waiting period, and how are pre-existing conditions handled?
• Can the premium change over time?

Hospital indemnity in North Carolina

Plan designs, benefits and availability vary by insurer and state, and policies sold in North Carolina are regulated by the North Carolina Department of Insurance. A practical way to choose a benefit amount is to start with your current health plan: look at your deductible and any per-day hospital copays, then compare plans that would realistically help with those costs.

Get help comparing plans

Hospital indemnity plans can look alike until you compare the details. Matt MacMillan, an independent broker in Mooresville, compares supplemental plans from the insurers he represents and walks you through what triggers a payment under each one. You can also explore dental and vision or all supplemental health options.

This article is general information, not an offer of coverage. Hospital indemnity insurance is a supplemental, limited-benefit policy. It is not major medical insurance, is not Medicare and is not a substitute for comprehensive health coverage. Benefits, waiting periods, limitations and exclusions vary by plan and state. The MacMillan Agency is not connected with or endorsed by the U.S. government or the federal Medicare program.