Hospital (Photo: Thinkstock) (Photo: Thinkstock)

LifeSecure Insurance Company has come up with a new hospital indemnity insurance policy that can help policyholders cope with a new trend in health care delivery: Hospitals’ growing tendency to keep patients in beds in “observation status,” without formally admitting the patients.

(Related: When Your Older Client, or Loved One, Goes to the Hospital)

Observation status may give hospitals a chance to monitor patients who are not clearly in need of inpatient hospital care, but it may expose patients to big bills that fall in a gray area between outpatient care coverage inpatient hospitalization coverage, and convalescent care coverage.

Traditional Medicare, for example, will pay for skilled nursing facility care for a patient recovering from a serious illness or injury, but only if the patient has been admitted as an inpatient for at least three days.

LifeSecure — a Brighton, Michigan-based company best known for its long-term care insurance policies — says its new Hospital Recovery Insurance with Observation Coverage includes many benefits that can help a patient cope with hospital care, even if the patient has not been formally classified as an inpatient.

The policy pays flat cash benefits that patients can use for many purposes, such as paying for transportation, or making up for lost wages.

The policy pays benefits when a patient has either an inpatient hospital stay or an observation unit stay.

The policy also pays a daily cash benefit directly to the policyholder following a qualified hospital stay.

An ambulance beneift rider can help pay for emergency transportation, and other riders can help people pay for diagnostic exams and stays in rehabilitation facilities.

The product is guaranteed renewable for life, and it can be sold on a guaranteed-issue basis.

LifeSecure is offering the product in Alabama, Alaska, Arkansas, Georgia, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Pennsylvania, South Dakota, Texas, Wisconsin and Wyoming.

 

— Read The Least You Should Know About Medicare Observation Status, on ThinkAdvisor.

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