HIP for Individuals
Why individuals need a Hospital Indemnity.
Why Individual Hospital Coverage Makes Sense
Hospital stays are expensive and unpredictable. Even with good health insurance, you could face thousands in out-of-pocket costs.
Hospital indemnity plans give you cash to help with these unexpected expenses. You decide how to spend the money.
What Original Medicare Doesn't Cover
Medicare has gaps that can create financial stress during hospital stays.
Medicare Part A Costs in 2025
- Deductible: $1,676 per benefit period
- Days 61-90: $419 per day copay
- Days 91+: $838 per day copay (lifetime reserve days)
- Beyond reserves: You pay everything
Hidden Costs Medicare Doesn't Cover
- Phone and TV charges in your room
- Private room upgrades
- Meals for family members
- Parking fees
- Transportation costs for family
| Expense | Medicare Covers | You Pay |
|---|---|---|
| Hospital services | Most costs | $1,676 deductible |
| Phone/TV (5 days) | $0 | $100 |
| Family meals | $0 | $150 |
| Parking | $0 | $75 |
| Total | — | $2,001 |
How Hospital Indemnity Helps
A hospital indemnity plan would pay you cash for each day you're hospitalized. Using the example above:
With a $400/day plan for 5 days, you'd receive $2,000 to help offset your $2,001 in costs.
Choosing Your Benefit Level
Hospital indemnity plans typically offer daily benefits from $100 to $500. Higher benefits cost more in monthly premiums.
Consider Your Financial Situation
- Tight budget: $100-$200/day might be sufficient
- Moderate income: $300/day provides good protection
- Higher income: $400-$500/day for maximum protection
Factor in Your Emergency Fund
If you have $5,000+ saved for emergencies, you might choose lower daily benefits.
If you have little savings, higher daily benefits provide more financial protection.
What These Plans Cost
Monthly premiums vary based on your age, benefit level, and location. Here are typical ranges:
| Age | $200/day | $300/day | $400/day |
|---|---|---|---|
| 65-69 | $35 | $50 | $65 |
| 70-74 | $45 | $65 | $85 |
| 75-79 | $55 | $80 | $105 |
Who Should Consider Hospital Indemnity
People on Fixed Incomes
If you're living on Social Security and a small pension, unexpected hospital costs can strain your budget.
Those With Limited Savings
If you don't have enough savings to comfortably handle a $2,000+ hospital bill, this coverage makes sense.
People With Health Conditions
If you have conditions that make hospital stays more likely, the peace of mind might be worth the cost.
Those Who Travel
If you spend time away from home, hospital indemnity coverage travels with you.
Application and Approval Process
Health Questions
Most plans ask basic health questions but don't require medical exams.
Common questions cover recent hospitalizations, surgeries, and major health conditions.
Age Limits
Most plans accept applicants up to age 75 or 80. Some extend to age 85.
Waiting Periods
Coverage typically starts 30 days after your first payment. Some plans cover accidents immediately.
Understanding Pre-existing Conditions
Many plans won't cover hospital stays related to conditions you had before buying the policy.
Waiting periods for pre-existing conditions usually last 6 to 12 months.
What Counts as Pre-existing
Typically includes conditions for which you:
- Received medical advice or treatment
- Had prescription medications
- Experienced symptoms that would cause someone to seek medical care
How Claims Work
Filing a claim is usually straightforward:
- Notify the insurance company of your hospital stay
- Submit basic claim form and hospital discharge summary
- Receive payment within 15-30 days
Additional Benefits to Look For
ICU Coverage
Many plans pay extra for intensive care stays, often double the regular benefit.
Skilled Nursing Benefits
Some plans include reduced daily benefits for skilled nursing facility stays.
Ambulance Coverage
Plans might include one-time payments for ambulance transportation.
What Hospital Indemnity Doesn't Do
These plans don't replace your primary health insurance. They supplement it.
They don't pay medical providers directly. The cash goes to you.
They don't cover outpatient services, doctor visits, or prescription drugs.
Bottom line: Hospital indemnity plans work best as financial protection against unexpected hospital costs, not as primary health coverage.
Comparing Your Options
Look at several plans before deciding. Compare benefit levels, premiums, waiting periods, and additional benefits.
Make sure you understand what's covered and excluded. Ask about rate increase history.
Consider working with a licensed insurance agent who can explain different options available in your area.
Making Your Decision
Hospital indemnity insurance isn't right for everyone. But if you're concerned about out-of-pocket hospital costs, it can provide valuable financial protection.
Start by calculating what a hospital stay might cost you with your current coverage. Then decide if the monthly premium is worth the peace of mind.
Remember, you can usually apply any time of year. You don't have to wait for Medicare enrollment periods.