It’s not hard to believe that, today, a hospitalization can be expensive. But, did you know that, in just one week, your client’s hospital bill could add up to more than $10,000?
For the average American, medical debt can ruin the chance to save money, and it can even negatively impact the future. Medical expenses are the top reason for bankruptcy in America.
The fact is your clients could have a hospitalization at some point in the future. As their insurance agent, what can you do to protect your clients from high out-of-pocket costs related to their health care?
What Is Hospital Indemnity Insurance?
Hospitalization for an injury or illness can lead to medical expenses even the best primary insurance plan won’t cover. Hospital indemnity plans are a type of ancillary insurance that provide a pre-determined amount of money directly to the beneficiary or their designee when they are hospitalized.
Because the benefit is provided directly to the individual, there aren’t any network restrictions. Hospital indemnity plans help people pay for costs associated with their hospital visits or stays, such as their copays, deductibles, and prescription drug fees.
The Value of Selling Hospital Indemnity Plans
For Agents
There are many benefits to selling ancillary products like hospital indemnity plans, but one huge plus is that you can sell them to clients of almost any age at any time of the year.
In other words, selling these plans allows you to better meet the needs of any client, and earn more in commissions!
How much extra commission? It’s reasonable to say you could practically double your earnings on any replacement Medicare Advantage (MA) plan you write by writing an affordable hospital indemnity plan with it.
For Your Clients
Seniors live on fixed incomes and must be prepared for worst-case health scenarios. The average hospital stay is 4.96 days. Hospital stays for the Medicare-eligible population are expected to rise to 170 million by 2034. Which is a 9 percent increase over the last 10 years.
Since low-premium MA plans typically have high inpatient hospital copays, extended hospital stays can be very expensive for senior population. Just a few days in the hospital could cost a client thousands in out-of-pocket costs!
In relation to the MA plan copays, here’s a quick example:
Your client with a standard MA plan spends seven days in an inpatient hospital. The inpatient hospital copay is $300 a day, the ambulance ride is $250, and the emergency room visit is a daily copay of $150. These costs can easily add up to more than $2,000!
Hospital indemnity plans offer coverage for all those copays. There are no network restrictions with hospital indemnity plans, and their flexible benefits cover inpatient and observation hospital copays.
For more info on the value of these plans, including a case study, read our post Selling Hospital Indemnity with Medicare Advantage: Is It Worth It?
Under-65 clients could also benefit from a hospital indemnity policy! If you have a client that has opted for a lower metal tier Affordable Care Act (ACA) plan to save on premiums, a hospital indemnity policy can pair well to provide coverage in case of hospitalization. Following a qualifying event, a client could use the payout to pay out-of-pocket costs.
Forming a Hospital Indemnity Sales Strategy
Prospecting
As you’re reviewing your book of business, make note of which of your current clients have Medicare Advantage plans. MA plans generally have a high out-of-pocket maximum, so explain to your client what that means when and if they have a hospital visit. Also, be sure to take a look at the MA plan’s specific copays.
Let your client know how a hospital indemnity plan can work with their Medicare coverage to lower their spending.
You can also send out individual mailers or letters about the different hospital indemnity plans available to them. To attract new clients, ensure you’re doing all you can to promote your business and market yourself.
Follow-Ups
Though they can be sold year-round, the best time to market hospital indemnity plans is after open enrollment at follow-up appointments. As you check in with your clients — especially those in low-to-no-premium MA plans with higher deductibles — remind them how a hospital indemnity plan can alleviate high inpatient hospital costs.
The best time to market hospital indemnity insurance is after open enrollment at follow-up appointments.
If you have clients who didn’t want to schedule a follow-up appointment, give them a call during lock-in. Ask if they’d be interested in hearing about a plan that can provide them further protection.
Starting Conversations
Don’t just call your clients; go visit them and have an in-person discussion about their options. Meeting face-to-face is even more important than you may realize. Research shows that in-person meetings still hold value as they generate trust and goodwill.
As your conversation begins, make sure your clients understand what their current or desired plan covers and what it doesn’t. Then, explain the out-of-pocket costs they could be held responsible for if medical problems arise. Doing so creates a great opportunity for you to bring up hospital indemnity plans, as long as you can discuss them compliantly.
Try tactfully asking your clients thought-provoking questions about how they’d be able to handle paying for a medical emergency. Questions like these can increase their willingness to hear what you’ve got to say.
- “Would you say you live on a fixed income?”
- “Would you be able to afford a visit to the hospital?”
- “How about a hospital stay lasting a few days?”
You don’t need to offer the solution to their problem(s) right away. First, just listen and encourage your client to talk about their own experiences. This will help you get the details you need for ancillary plan research and a great solution. Best of all, it will help make your client feel valued and build their loyalty to you.
Note: Remember, if you’ll be talking about hospital indemnity insurance at a Medicare sales appointment, it should be noted on the Scope of Appointment.
Closing Sales
As your appointment draws to an end, be prepared to help your clients answer perhaps the biggest question that will be on their minds: Is it really worth having hospital indemnity insurance?
For those in low-to-no-premium MA plans with high deductibles, the answer is very likely yes.
Have your client consider the cost of having hospital insurance and that of foregoing it. The annual premium for a hospital indemnity plan for a Medicare-aged beneficiary can be as little as $400. Going to a hospital in an ambulance and staying there for one day will likely exceed that cost tenfold in hospital bills.
Sometimes a sale is as simple as explaining to your clients that they have that option. Let your clients know this extra protection could truly pay off.
No matter the outcome, keep this in mind: In a world where having a clean bill of health can cost a pretty penny, hospital indemnity plans, and the agents who market them, shine.
Ritter Insurance Marketing offers a wide selection of competitive hospital indemnity plans. Register for free today to start your hospital indemnity journey with us!
Not affiliated with or endorsed by Medicare or any government agency.
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