Did you know that in 2009, the average hospital stay was 4.5 days? The average hospital charges totaled $30,655, and out-of-pocket costs not covered by health insurance totaled $9,173. Those numbers don’t even include daily living expenses! If you have to have surgery, or are confined to the hospital, can you afford it? Can you also afford to miss that much work? If you had a fixed indemnity plan, the answer may be “YES!”

What is a fixed indemnity plan?

A fixed indemnity plan is a type of supplemental health insurance plan. One of the benefits of these plans is that instead of paying doctors or hospitals, supplemental plans pay you directly. The benefits vary depending on the level of plan you choose, but they are given to you as direct cash benefits. This means that you can use your benefit amount however you need—to help cover hospital bills, to help with living expenses, or even to help cover lost income from missing work.

What does it cover?

Fixed indemnity plans often cover 8 services*:

  1. Hospital confinement
    • Without surgery
    • With surgery
  2. ICU/CCU confinement
  3. Outpatient surgery
  4. Continuous care
  5. Emergency room
  6. Outpatient x-ray and laboratory procedures
  7. Ambulance
  8. Physician office visit

Depending on your policy, there may be limits to the maximum numbers of days covered per calendar year, or lifetime dollar amounts. The benefits may even be subject to a 30-day waiting period. Make sure to review your fixed indemnity policy closely and discuss any questions with a licensed insurance agent.

Remember, a fixed indemnity plan is designed to be paired with a qualified health insurance plan. It is not meant to serve as a stand-alone plan. If you only carry this form of supplemental health insurance, you may still be subject to a tax penalty for not carrying a qualified health insurance plan.

How much is the daily benefit?

The benefit could be between $50 and $3,500.* The daily benefit amount will typically vary depending on 3 factors:

  1. Type of service received (e.g. an ambulance ride versus a hospital confinement without surgery)
  2. Type of plan chosen
  3. Age

How much does it cost?

Your monthly premium amount could be as low as $27.* There are typically several factors that will determine the monthly premium of your fixed indemnity plan:

  1. Age
  2. Gender
  3. Tobacco use

You can also add dependents (under 18 years old) to a fixed indemnity plan. The premium price for a dependent may differ from the policy holder’s monthly premium.

How can you find the right plan for your needs?

If the thought of spending thousands of dollars on one hospital visit makes you nervous, don’t worry. HealthMarkets offers affordable fixed indemnity plans. A licensed health insurance agent can help you choose the level of plan you need and help you add dependents. By the way, our guidance is free. Call an agent over the phone at (800) 642-0607 or find a local agent to meet with in person.

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References

* Actual benefits and rates vary by state. The supplemental benefits referenced are taken from Texas Fixed Indemnity Direct Form CH-26126-IP (10/13), or its state variation which is underwritten by The Chesapeake Life Insurance Company. Administrative offices located in North Richland Hills, TX. Product availability varies by state. A complete list of benefits, exclusions and limitations is available upon request. Please contact a licensed agent and refer to the Policy.

SOURCES: http://www.hcup-us.ahrq.gov/reports/statbriefs/sb180-Hospitalizations-United-States-2012.pdf | http://www.hcup-us.ahrq.gov/reports/statbriefs/sb181-Hospital-Costs-United-States-2012.pdf

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