To help your Medicare clients on a fixed income, consider this outside-the-box solution: pairing hospital indemnity insurance with specific low-premium Medicare Supplement (Med Supp) plan options. By creating a portfolio for your clients that includes this product combination, you can actually provide them with good coverage for less money.
To understand how this coverage combination works, it’s important to make sure you know what hospital indemnity insurance is, and which Med Supp plans work best in combination with it.
Hospital Indemnity Basics:
- It’s a supplemental insurance offering that pays regardless of what other medical insurance the client may have, reducing the financial burden of a hospital stay
- Pays directly to the insured person, not to medical providers
Some of what hospital indemnity insurance pays for:
- Starts paying on day one for hospital confinement benefit
- Observation unit benefits
- Emergency room charges
- Transportation and lodging
- Inpatient mental health care
- Guaranteed issue between ages 60 and 79
- There are only a few health questions such as, in the past 12 months have you:
- Used oxygen
- Been treated or diagnosed with Alzheimer’s, Parkinson’s, multiple sclerosis, or chronic obstructive pulmonary disease (COPD)
- Had diabetes requiring more than 50 units of insulin or three or more oral meds
- Been diagnosed or treated for heart attack, stroke or cancer
- Been on dialysis treatment
- Six-month, pre-existing condition limitation
- Two-year contestability period
Hospital indemnity coverage works as a great supplement to existing health insurance coverage. If clients on Medicare purchase a suitable hospital indemnity plan, then they could potentially save on Med Supp premiums by getting a low-premium plan to round out their coverage. Two suitable low-premium Med Supp plans that pair well with hospital indemnity insurance are High Deductible Plan G and Plan L. For more details, Medicare.gov provides a comprehensive comparison of all available Med Supp plans.
High Deductible Plan G Med Supp Basics
- Provides the same coverage as the standard Plan G, but has a higher deductible in exchange for lower premiums.
- The deductible must be met before the plan begins to pay
- Medicare Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used up)
- Medicare Part B coinsurance or copayment
- Skilled nursing facility care coinsurance
- Part A deductible
- Part B excess charges
- Foreign travel emergency (up to plan limits)
Plan L Med Supp Basics
- Plan L is a Med Supp Insurance plan that helps pay for certain out-of-pocket expenses associated with Medicare Part A and Part B coverage.
- Unlike most Med Supp plans, Plan L pays for only part of the cost of covered services. As a result, you’ll still have to pay some out-of-pocket costs, but the plan’s premiums are less expensive than most other Med Supp plan alternatives.
- Medicare Part A coinsurance and hospital costs
- 75% of the Medicare Part B coinsurance or copayment
- 75% of blood (first three pints)
- 75% Part A hospice care coinsurance or copayment
- 75% skilled nursing facility coinsurance
- 75% Medicare Part A deductible
By offering these low-premium Med supp plans along with a suitable hospital indemnity policy, your clients can actually get good coverage for less cost. See below, a case study illustrating this selling point.
Roger is 77, and living in Omaha, Nebraska.
He has purchased a hospital indemnity plan from a reputable carrier with premiums of $33.05 per month. Through the advice of his insurance agent, he has paired that policy with a High Deductible Plan G Med Supp policy with premiums at $177.33 (or alternatively, a Plan L Med Supp policy with premiums at $85.17).
Roger experiences an unfortunate slip and fall that requires a hospital stay and related treatment. See below, the coverage payouts that occurred as a result of his injury based on the coverage in place.
Hospital Indemnity Pays (paid directly to Roger)
High Deductible Plan G Pays1
Plan L Pays1
$1,250 inpatient/observation hospital stay
$150 emergency room
$500 transportation and lodging
$2,000 skilled nursing
$4,150 from hospital indemnity insurance
100% after deductible ($2,700) is met of Hospital Stay 5 days ($360 per day)
100% after deductible ($2,700) is of Skilled Nursing 20 days ($120 per day)Out-of-pocket (with Plan HDG alone)
$1800 Hospital Stay
$900 Skilled Nursing
100% of Hospital Stay 5 days ($360 per day)
75% of Skilled Nursing 20 days ($120 per day)Roger pays out of pocket
$0 Hospital Stay
$600 Skilled Nursing
The above scenario shows that by pairing a hospital indemnity plan with a low-premium Med Supp plan (Plan L or High Deductible Plan G), out-of-pocket is essentially negligible. It’s clear that clients can get better coverage for less premium by utilizing these pairing combinations. Now, that’s a sales idea you can take to the bank.
How to Get Started
If you’re interested in offering this innovative product pairing to your prospects and clients, then talk to a licensed Med Solutions marketing consultant at Senior Market Sales® (SMS) by calling 1.877.888.9996. SMS has more than four decades of experience in the Medicare market and can help you get contracted with top carriers offering these types of products in your state.
Get Started Now
1If Roger chooses this plan to pair with his hospital indemnity plan.