A 'hospital indemnity' policy differs from a major medical policy because it:
Explanation
A hospital indemnity (or 'hospital cash') policy pays a flat, scheduled benefit — for example, $200 per day of hospital confinement or $1,500 per admission — without regard to the actual medical costs. This contrasts with a major medical or reimbursement policy, which pays based on the actual expenses incurred (subject to deductibles, coinsurance, and out-of-pocket maxima). Hospital indemnity benefits are typically considered SUPPLEMENTAL coverage and do NOT qualify as minimum essential coverage under the ACA; the consumer needs comprehensive coverage in addition. Option A describes catastrophic policies. Option B describes reimbursement plans (the major medical model). Option D is fabricated. Hospital indemnity is a 'valued' or 'indemnity-style' contract, paying a scheduled amount.
Law Reference: Cal. Ins. Code §10123 and federal PPACAPractice all 315 questions free — no signup required.
Related questions on this topic
- With respect to Essential Health Benefits on an ACA-compliant plan, an insurer may impose:
- A spouse of a covered employee loses dependent coverage because of divorce. Under federal COBRA, the maximum continuation coverage period available to the divorced spouse is:
- To be eligible to contribute to a Health Savings Account (HSA) in 2026, an individual must be covered by a High-Deductible Health Plan (HDHP) AND:
- Which of the following is the BEST description of an Exclusive Provider Organization (EPO)?
- A health plan member sees an in-network specialist for a service that costs $500. The plan has a $250 deductible (already met), 20% coinsurance, and a $30 copay for specialist visits. After meeting the deductible, the typical structure is:
- Which of the following BEST describes a 'staff model' HMO?
Last reviewed: · editorial process