Basics of Hospital Expense Insurance
Hospital expenses can be substantial, and if you have them, you may want to consider purchasing hospital expense insurance. Hospital expense insurance is not the same as health care insurance and does not provide medical care. Rather, hospital expense insurance pays for the high cost of your medical bills. The difference between an average bill and what the insurance company reimburses will determine how much hospital expense coverage you need in order to afford your bills. Expense coverage works like a credit card that builds up a balance over time until it reaches its limit when the next bill arrives from a provider.
Hospital expense coverage is a supplemental form of health care insurance. It is designed to provide temporary financial assistance for individuals who need financial help because of an injury or illness, but it does not provide ongoing medical treatment. Hospital expense coverage helps cover the cost of medical bills that are not covered by other health insurance plans, and they do not cover routine visits to doctors or checkups. Hospital bills average about $1,200 per day for a hospital stay, but few patients pay even close to that amount.
People who purchase hospital expense policies are usually on limited income with limited resources and assets because they are unemployed or unable to work due to an injury or illness. Those who have to pay for their medical bills out of pocket are at risk of being unable to make mortgage payments or living expenses.
Hospital expense insurance is available in two types: accidental coverage and extended coverage. Accidental coverage pays the hospital costs when no one is responsible for the accident, such as if a visitor was hit by a car, or if a patient was injured in an auto accident while on vacation home. Only when there is negligence can coverage be denied. Extended hospital expense insurance covers all types of injuries and illnesses and reimburses the person for medical bills beyond the limit of hospital reimbursement without having to file a lawsuit.
Many people who have high bills are unaware of hospital expense insurance. They may be more likely to consider it because their medical expenses could bankrupt them and they may not be aware that the medical expenses are sometimes covered by insurance. Hospital expense insurance is not usually offered in all states or by all insurers, because many physicians require patients to pay a portion of the costs of services rendered, so they do not want anyone with a prior medical history to receive free care.
A hospital accident is when you get hurt during your stay in a hospital. You can get injured on the way to the hospital, while staying there, or while leaving the hospital after treatment has ended. Generally, an accident happens when you get hurt in a way that makes you unable to pay for medical bills.
Hospital expense insurance pays for all medical bills related to your accident and injury. If you have an accident at work or while traveling, additional coverage is available for those types of accidents. Hospital expense insurance covers the medical costs of your subsequent treatment and rehabilitation. It does not cover the whole cost of hospital or physician bills not related to your accident or injury. If you wish to build up a hospital emergency fund, hospital expense insurance may be used along with savings plans to help pay future expenses from these bills during treatment and recovery. Hospital expense insurance serves as an emergency fund in place of having a large amount of money available. If you have an existing medical condition, or if you are going to have a pre-existing condition after your injury, hospital expense insurance will pay for the costs that your health care insurance does not cover.
Health care insurance will pay for your medical bills to diagnose and treat a particular illness or injury, but it is unlikely to reimburse those who get sick or injured while traveling or working. As an alternative to hospital expense coverage, you can use health care insurance benefits outside your home state when traveling on vacation.
If you are a member of the military and live in the US, you can purchase true accident coverage from the government for free. Military hospital expense insurance usually covers 80 percent of your medical costs, with an annual coverage amount that can be increased.
Hospital expense insurance works differently than medical insurance. The hospital expense policy helps you pay for your medical bills, rather than paying for the treatment of a particular illness or injury. Hospitalization expenses are separate from other medical expenses, and many patients get these two types of bills mixed up. If you have a serious illness or injury, you may have to pay the full cost of it out-of-pocket after the help provided by medical insurance runs out. A hospital expense policy is designed to prevent this from happening by supplementing your health care benefits with additional coverage for any health emergency that may arise.
If you have a serious illness or injury, you may have to pay the full cost of it out-of-pocket after the help provided by medical insurance runs out. A hospital expense policy is designed to prevent this from happening by supplementing your health care benefits with additional coverage for any health emergency that may arise.
Under a hospital expense policy, you pay a set amount for every day you stay in a hospital and then submit the bill to your insurance company. Your insurer will review the charges on the bill and approve benefits or deny them based on what is reasonable and not subject to monetary limit. The company also pays for your next trip home if you are entitled to it by law. The policy also covers for hospital-based outpatient surgery if it is performed in an emergency or medically necessary. Most hospital expense plans do not cover outpatient surgery that is elective.
Since the costs of health care are expensive, people often wonder if they should buy hospital expense insurance or medical insurance. Many people purchase both policies because they want to be covered in all situations, and they want their families to be covered too. A few states have requirements for medical insurance and may not allow hospitals to charge more than a certain amount of money for services rendered. The patient may have to pay something out-of-pocket even if they were injured in a car accident.
If you are hit by a car and have no health insurance, medical expenses can be very high. Medical care at the hospital is expensive, especially if someone needs extensive care or rehabilitation. Hospital expense protection can help pay for medical bills over and above what you may expect to be covered by health insurance. With good coverage, hospital expenses can run as high as $100,000 or more depending on the nature and extent of injuries sustained by the patient. Medical expenses should never be blamed on an auto accident.
There are three types of hospital expense insurance: general hospital expense insurance, hospital expense policy for specific injuries, and emergency room protection (ERP). The general hospital expense policy covers expenses incurred in an emergency room setting, regardless of the cause of the emergency. If you have an accident, and the injuries sustained help lead to medical bills that exceed the benefits offered by your health insurance plan, you should consider buying a policy that covers all hospital and physician bills incurred during treatment. The ERP policy is for people who have an accident at work. Most ERP policies are based on a "short-term" coverage period, which means they cover only 90 days from a specified time period after your loss of consciousness.
The ERP policy pays all medical expenses up to $1 million per accident or injury, unless there is another coverage in force that provides more protection.
Conclusion
Hospital insurance is a complex product that provides protection against the financial ramifications of being hospitalized. Even though hospital expense insurance can be very expensive, some people buy it to protect themselves and their families from medical expenses. If you have an existing medical condition or if you are going to have a pre-existing condition after your injury, hospital expense insurance will pay for the costs that your health care insurance does not cover. Though you may be tempted to use the money in savings or investments instead, this may prove disastrous in case of a serious injury. The policy's benefits are administered by a separate company from the insurer and are based on the terms of the policy rather than any contract with any provider.