Merritt Personal Lines Manual: Hospital-Surgery Coverage

This specialty coverage -- which was more common in past decades that in the 1990s -- insures you against specific, limited costs related to surgical procedures and breif hospital stays.

Most policies may provide first-dollar coverage. That means that there is no deductible or amount that you have to pay, for a covered medical expense. Other policies may contain a small deductible. In either case, the coverage has to start quickly, because it's designed not to last very long.

Hospital-surgical policies usually do not cover lengthy hospitalizations and costly medical care. In the event that you need these types of services, you may incur large expenses that are difficult to meet unless you have other insurance.

A caveat: These benefits are generally considered to be reimbursements for medical expenses already incurred and that can raise some tax issues.

You can't deduct medical expenses from your income for tax purposes that have been reimbursed by the insurance company. This is true whether the premiums for the policy were paid by you or your employer.