Hospital Indemnity Plans create cost predictability and security with Medicare Advantage (MA). It pairs with MA to fill the gap in market between a low cost Medicare Advantage and a higher cost Medicare Supplement. The resulting coverage gives peace of mind to the consumer and allows for the ability to save money.
Medicare Advantage plans typically have low premiums, but the plans include multiple deductibles, co-payments and co-insurances that make them significantly more expensive. For example, the typical inpatient hospital deductible is $200-250 per day for the first seven days. The average hospital stay for patients age 65 and over is 5.5 days; resulting in $1,250 in out-of-pocket costs. And this is just one of many expenses. There is a Maximum Out Of Pocket (MOOP) limit available for Medicare Advantage plans, but it is too high ($6,700) and provides little consolation.
When undergoing treatment or recovering for an extended period of time, people still have to pay all of their regular bills including health insurance premiums, rent or mortgage, credit card bills, food and utilities, etc. These policies pay either a lump sum upon first diagnosis, up to as much as $50,000, or pay per a schedule based on care received.
Over 3 million Americans now have protection against such costs, through a hospital indemnity plan or critical illness plan, purchased on an individual basis or through a plan offered by their employer. Supplemental policies, like Hospital Indemnity policies, do have value and have provided much-needed financial assistance to many who’ve experienced a critical illness. Why not carry this protection over in retirement in addition to a Medicare Advantage Plan?
Are there Hospital Indemnity Plans designed specifically for Medicare Advantage members?
Recently, companies such as Sentinel Security Life and Medico, introduced such plans filling the gaps in Medicare Advantage coverage. Flexibility of these plans includes benefit amount and Days of Coverage. This allows you, as the agent, to offer a customized protection plan that acts
Hospital Indemnity Plan Benefits Typically Include:
- Hospital Admission for Days 1-5
- Ambulance Transportation
- Emergency Room Coverage
- Laboratory and Radiology Benefits
- Skilled Nursing Facility Benefits
Medicare Advantage & Hospital Indemnity Plans – Working together
According to the Centers of Medicare and Medicaid Services (CMS), a Hospital Indemnity plan can be marketed and sold during a Medicare Advantage appointment, as long as it was agreed to in the Scope of Appointment. For many people with Medicare Advantage, the Hospital Indemnity plan may be beneficial in limiting their out-of-pocket costs.
By taking a $0 or low cost Medicare Advantage Plan, this allows budget flexibility with a majority of consumers to cover the gaps left behind. Spend the savings generated by a lower premium plan to give your clients peace of mind and security. Now you have two sales in one appointment and a client who has a customized insurance portfolio for their specific needs!
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