Hospital Expense Insurance: What is it and what does it cover?

Hospital expense insurance, also known as "hospitalization insurance," is a supplemental insurance plan that pays you a certain amount in cash to help you cover a hospital stay, whether it is planned or not, and other types of medical services that can be included in the policy, including prescription medicines and other expenses related to hospitalization.

Hospital Expense Insurance: Article Contents

What Is Hospital Expense Insurance?

Let's start by defining the term "hospitalization." The concept refers to care requiring admission to the hospital for treatment, which means staying in the hospital overnight. Being hospitalized for one night exclusively for observation may be considered outpatient care.

Hospital Expense Insurance: What is it and what does it cover?
Un seguro de este tipo puede darte la tranquilidad de no endeudarte a ti ni a tu familia | Foto: GETTY IMAGES

A hospital stay may cause financial difficulties because the costs of this type of medical care can add up very quickly. Given the uncertainty of being admitted to a hospital, hospitalization insurance will give you the peace of mind of knowing that you will at least have help covering unexpected expenses related to the stay.

Hospital expense insurance is not included the minimum essential coverage outlined in the Affordable Care Act (ACA, also known as "Obamacare"). This type of coverage is considered a supplemental insurance plan.

With this type of insurance, you will receive a cash payment for expenses not covered by your primary health insurance, money which can be used you as you see fit. For example, you can pay hospital bills or costs related to recovery or rehabilitation. You won't have to meet deductibles and you will receive the benefit regardless of whether the service is provided in your insurance carrier's network or not. However, we recommend that you carefully read the terms and conditions of your policy before purchasing a plan to ensure you have a thorough understanding of its coverages.

How Does Hospital Expense Insurance Work?

As an example, let's sayone day you don't feel well and go to the emergency room. The doctor examines you and decides that you should be admitted to the hospital for 24 hours for observation. At the end of the observation period, you simply submit a claim to your insurance company and it will pay out the amount established in the policy, in some cases in as little as one day.

Remember: the only thing you have to do is to make sure that you properly fill out the claim form after having received medical care that is covered by your policy. Send the form, along with copies of the receipts you have, and that's it. Shortly you will receive the amount of money outlined in your plan for this specific service (up to a maximum amount per calendar year).

Why Should I have Hospital Expense Insurance?

Before the COVID-19 pandemic, the average hospital stay for a patient in US was 4.7 days. If you become ill or suffer an injury that requires hospitalization, the costs begin to add up very quickly, which means that a hospital stay can end up causing you serious financial difficulties. Even if your stay is planned ahead of time, hospital expense insurance can be a big help:

  • The money is yours to use as you see fit.
  • You will receive the benefit even if you are treated by specialists who are out of network providers.
  • You don't have to meet deductibles.
  • You can obtain coverage for your entire family.
  • You can renew coverage up to the age of 65.

What Does Hospital Expense Insurance Cover?

Hospital expense insurance pays you a fixed amount for each day you are admitted to the hospital up to a maximum amount (established in your policy) for each calendar year. In addition, depending on your premiums, you may have the right to receive compensation for other types of services, including:

  • Transport in ambulances (by land or air).
  • Medical attention in the emergency room.
  • Surgery.
  • Anesthesia.

Frequently Asked Questions

Can I use the insurance to cover out-of-pocket-expenses?
Yes. The money you receive from your benefit can be used as you see fit, such as household bills, deductibles from other insurance plans, copays, and rehabilitation.
Who will receive the payment: me or the health care provider?
Payments are made directly to you, not to doctors, hospitals, or other types of service providers. The check will be sent directly to you.
The company I work for has already offered me a good health insurance plan. Do I still need additional coverage for hospital stays?
Regardless of how good your health insurance plan is, there can always be additional expenses that you will have to cover on your own. A hospital stay resulting from illness or an accident can be very costly, and that's without factoring in the costs of doctor visits and copayments, among others. The financial aid of having hospital expense insurance can save you and your family a lot of headaches.
Is there a waiting period before the insurance becomes effective?
No. As soon as you purchase the plan, the coverage is effective with no waiting period.
Is the claim process easy?
Yes. You only have to fill out the claim form and send it along with copies of your receipts. Your case will be reviewed by a professional in a short time frame.
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