Definition - What does Hospitalization Insurance mean?
Hospitalization insurance is a health insurance policy that covers payments for hospital stays, outpatient medical treatment, surgery, or any hospital-related activity that involves the insured's health. This coverage is part of the health plan for government workers in the United States.
Hospitalization insurance is also called hospital cash plan or hospital indemnity insurance.
Insuranceopedia explains Hospitalization Insurance
Hospitalization insurance differs from a typical health plan by giving the insured a lump sum after they show their medical receipts to the insurer, rather than reimbursing payments for medical or hospital bills. This allows the insured to use the money however they please.
US government workers do not need to buy this insurance from private companies because their insurance foots the bills related to hospitalization.