When was the last time you went to a hospital? Chances are, it was to see someone else — maybe an ill friend or a family member with an injury.
When you visit a patient, you’re probably not spending that time imagining yourself in a hospital bed, especially if you’re young and healthy. It’s worth thinking about, though. Medical issues like stroke hospitalizations, opioid addiction and pregnancy complications are on the rise for millennials.
These problems come at a cost, even with health insurance. That’s why it helps to have a backup plan — a hospital indemnity insurance plan, in this case — that can fill the gaps in traditional health insurance and help you avoid a tower of medical bills.
Just ask 30-somethings Evan and Joy, mom and dad of new baby Cam. Thanks to a hospital indemnity policy, the couple saved $14,500 in expenses after a long and tiring medical journey.
Joy had a relatively uncomplicated pregnancy until the start of her third trimester, when at 32 weeks she learned she had high blood pressure and would need to be hospitalized until it was safe to deliver her baby early.
Two weeks later, she had a Cesarean — but could only see Cam briefly before he was whisked away to the NICU for a minor lung problem. He was there for two weeks before he came home.
Though the homecoming was sweet, it had its rough patches. On top of caring for a newborn and not getting enough sleep, Joy and Evan still had bills coming in from her hospital stay, as well as Cam’s. But thanks to their supplemental policy, they had a cash payout to cover those costs outright — with a little left over to pay for diapers and baby clothes, too.
How It Happened
Once coinsurance did kick in, the couple still had to reach a family out-of-pocket maximum of $13,300 before their insurance would pick up the rest of the costs of Joy and Cam’s care. Because of Joy’s early hospitalization, she exhausted her paid maternity leave and began using unpaid time off through the Family and Medical Leave Act, so the family had to survive on Evan’s income alone.
Luckily, Joy had bought a supplemental hospital indemnity policy two years before she became pregnant. At about $12 a month, she figured she could afford the extra cost in exchange for peace of mind, especially after seeing her sister unexpectedly hospitalized for pneumonia in 2015.
The plan paid out fixed amounts for each day that she and Cam stayed in the hospital, a lump sum of $14,500. Because of that, Joy could take the full maternity leave she’d originally planned while the couple kept up their mortgage, utilities, groceries and Cam’s ongoing health care needs.
What Could Have Happened (But Luckily Didn’t)
If Joy hadn’t had that supplemental policy, she and Evan would have been on the hook for her plan’s out-of-pocket maximum, which might have meant depleting their life savings and racking up a medical debt that would be tough to pay as a young family with a new baby.
The hospital indemnity plan saved their financial future — and it could do the same for you. Even if you’re young and healthy, life can throw a wrench in your plans. It doesn’t cost much to buy a sense of security: A low-cost supplemental policy can help protect you (plus your family and savings) from the unpredictable, the accidental and everything in between.
For more on how to know if a hospital indemnity plan is right for you, read 6 Questions to Ask Before Buying Hospital Indemnity Insurance.