Now, more than ever before, Medicare Advantage plans are leaving beneficiaries exposed to hefty bills for hospital stays. Hospital indemnity insurance helps your clients have the money they need to get back on their feet!
A type of ancillary product, hospital indemnity insurance can pay for expenses related to inpatient stays. Here’s why you should carve out a spot for these plans in your portfolio this fall.
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The Ideal Cross-Sale
Many Medicare eligibles are attracted to Medicare Advantage (MA) plans because of their extra benefits and low, or nonexistent, premiums. While appealing for those reasons, $0-premium MA plans have high copays and high deductibles. They can also have annual out-of-pocket limits as high as $6,700. A tab like that can spell big trouble for seniors who require medical attention.
For someone 65 to 84 years old, the average length of a hospital stay was 5.2 days in 2017, and the average cost of a stay was $14,900 that year. Even with health insurance, it can be tough for clients to afford their payments, especially if they’re living on a fixed income or miss work due to their illness or injury.
Even with health insurance, it can be tough for clients to afford hospital payments.
Hospital indemnity plans provide a fixed amount of money directly to the beneficiary upon a qualifying event. This predetermined benefit can pay for deductibles, ER visits, observation stays, surgeries, medications, transportation, lodging, health screenings, and more. Additionally, individuals can add riders to these policies to help pay for cancer, ambulance, or skilled nursing related costs!
If you’re a Medicare sales agent, offering this product is a great way to go that extra mile for clients. It’s truly possible to earn more money selling hospital indemnity insurance. And, one of the greatest things about these plans is that you can sell them year-round!
A Huge Market Opportunity
Let’s take a look at some statistics. According to the Kaiser Family Foundation’s “A Dozen Facts About Medicare Advantage in 2020”:
- 36% of Medicare beneficiaries are in MA plans as of 2020.
- 89% of MA beneficiaries are enrolled in Medicare Advantage Prescription Drug (MAPD) plans.
- Of those 89% of MAPD beneficiaries, a whopping 60% don’t pay a premium for their plan.
- Those in MA plans in 2020 have average out-of-pocket limit of $4,925 dollars for in-network services (HMOs or PPOs) and an average out-of-pocket limit of $8,828 dollars for out-of-network services (PPOs).
Right now, there are a lot of beneficiaries out there who could benefit from hospital indemnity plans. With the Congressional Budget Office projecting that MA enrollment will grow to 51 percent by 2030, you should expect to keep meeting people who make excellent prospects for this product.
Right now, there are a lot of beneficiaries who could benefit from hospital indemnity plans.
Is Hospital Indemnity Insurance Right for My Client?
People of any age can enroll in this form of coverage, but it’s not a good fit for everyone.
The ideal client for hospital indemnity insurance is someone who’s already in your book of business. Specifically, consider enrollees who have $0-premium MA plans. Also look at clients who are on fixed budgets and can’t afford high out-of-pocket costs.
Before making any suggestions to your client, do your research. Compare the benefits of your client’s primary health insurance plan and hospital indemnity plans, and see if he or she stands to gain more in protection than they have to lose in monthly premiums.
Are There Any Rules on Selling Hospital Indemnity Plans?
Please note that you cannot sell these plans at a Medicare sales appointment UNLESS your client has checked off the hospital indemnity related box on their Scope of Appointment form. Fortunately, agents and clients are able to complete same-day Scopes of Appointment .
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So, is hospital indemnity insurance worth selling with Medicare Advantage plans? We believe the answer is a resounding YES. Like blankets and sweaters, certain MA plans and hospital indemnity plans work better together. Having more complete coverage will help keep your clients feeling all warm, fuzzy, and protected even on the coldest days ahead.