Copay Protection Plans

Help lower the cost of a hospital stay or serious illness for Medicare beneficiaries.

What is a Copay Protection Plan?

Even with Original Medicare or a Medicare Advantage plan, a hospital stay or serious illness can result in significant out-of-pocket expenses—including deductibles, copayments, and coinsurance. That’s where a Copay Protection Plan, also known as Hospital Indemnity Insurance, Policy comes in.

A Hospital Indemnity Policy is a type of supplemental insurance that pays you a set dollar amount per day (or per occurrence) if you're hospitalized due to an illness or injury. It's designed to provide cash benefits directly to you—not to the hospital or provider—so you can use the money however you need.

Common Out-of-Pocket Costs with Medicare

Even with Medicare coverage, beneficiaries may face:



• Medicare Part A deductible ($1,676 in 2025 per benefit period)
• Daily hospital copays (starting on day 61 of an inpatient stay)
• Skilled nursing facility copays (after 20 days)
• Emergency room and ambulance fees
• Copays under Medicare Advantage plans (which may charge $250–$450 or more per day for hospital stays)

These costs can add up quickly—especially during a longer hospitalization or if multiple hospitalizations occur in a year.

How Hospital Indemnity Helps

Here’s how a Hospital Indemnity Policy can help offset those costs:

Daily Hospital Cash Benefit

The policy pays a fixed amount per day you're hospitalized. For example:

• $250 per day for up to 10 days = $2,500
• This can directly offset a Medicare Advantage plan’s daily hospital copay.

Skilled Nursing Facility Coverage

Some indemnity plans offer additional benefits for stays in a skilled nursing facility, which are only partially covered by Medicare after day 20.

Emergency Room and Ambulance Reimbursement

Many plans offer fixed benefits for ER visits, ambulance transport, or observation stays, helping to cover the growing out-of-pocket costs associated with these services.

Cash Paid Directly to You

You can use the money however you choose:

• Pay deductibles or copays
• Cover household bills while you recover
• Pay for travel or lodging if receiving treatment away from home
• Offset income loss if you or a caregiver miss work

Why It’s Especially Helpful for Medicare Advantage Members

Hospital indemnity policies are particularly valuable for those on Medicare Advantage (Part C) plans, because these plans often come with daily inpatient copays (e.g., $300–$400/day for the first 5–7 days). A hospital indemnity policy can reimburse you for all or part of those daily charges, making hospitalization financially manageable.

A Real-Life Example

Mary, age 72, is hospitalized for 4 days due to pneumonia.