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. The description of paying only for catastrophic claims above a high dollar threshold describes catastrophic policies. The description of dollar-for-dollar reimbursement after the deductible and coinsurance describes reimbursement plans (the major medical model). And the claim that only the physician's professional fees are paid, with room and board excluded, is fabricated. Hospital indemnity is a 'valued' or 'indemnity-style' contract, paying a scheduled amount.