If you are signing up for a hospital cash back plan then there are certain rules that you need to be aware of at the outset. There is a misconception among South Africans that a hospital cash back plan is a route to easy money. It is a form of financial protection when you are severely ill and hospitalised. The deferred period rule ensures that payouts are only made to those who are in a position where they cannot work for a period of time and may therefore be financially inconvenienced by being hospitalised.
How long do you have to be in hospital?
A deferred period may be 2 to 3 days meaning that you will not be able to claim from a hospital cash back plan unless you are in a hospital for more than 2 to 3 days. This deferred period may vary from one insurance provider to another and even among individual plans. Some standard or bottom range plans will have longer deferred periods than premium plans but it usually only varies by a day or two at the most. It is important that you clarify these details at the outset to avoid disappointment at the time of a claim.
Why are deferred periods important?
Consumers are sometimes quite upset by rules such as a deferred period. However, it is important to note that the insurance company is not ‘ripping’ you off. In fact a deferred period protects you by ensuring that other unscrupulous consumers do not try to ‘rip’ off the insurance company by claiming excessively. More importantly though, the deferred period rule ensures that the hospital cash back plan protects you as it is meant to – when you are severely ill and cannot work.
Being hospitalised for a day or two does not always mean that you are severely ill or that you are being significantly financially inconvenienced. You could have been admitted for a day or two for observation, certain tests or even minor procedures like a tonsillectomy (surgical removal of the tonsils). The point is that you can be back on your feet and at work shortly thereafter. Hospital cash back plans are meant to protect you when you need it the most, when you are hospitalised for long periods of time and cannot work.
Deferred periods are not unique only to hospital cash back plans. Other form of similar insurance policies, like income protection, have a similar rule.
Quick and Easy Money
When you take any insurance policy, you do so to protect you in the event that you will be financially inconvenienced in certain situations. The same applies for a hospital cash back plan. It is not a line of credit or ‘lottery ticket’ to score on quick and easy money. This should not be the reason why you signed up for the hospital cash plan in the first place.
Faking Illness and Acting Sick
Insurance companies are all too aware of the usual ‘tricks’ – claiming that you are severely ill or extremely depressed or stressed thereby prompting the doctor to admit you in hospital. While it is the doctor’s duty to take the necessary measures until the seriousness of a condition can be confirmed or excluded, this should not be a means to cash in on the payout of hospital cash back plans. You are actually committing fraud by faking an illness in an attempt to get your doctor to admit you into hospital so that you may claim money from your hospital cash back plan.
Medical aids limit days in hospital
Fortunately rules like a deferred period counteract this practice. Nevertheless people still try to use their hospital cash back plans to get a hold of ‘easy money’ and even medical aids have become aware of this practice. Remember that if you are a medical aid member and going into hospital unnecessarily, then you are draining the scheme’s pool. Medical aids have now reduced the number of days that you can stay in hospital for certain conditions. This means that should you stay longer, and if it is not warranted and motivated for by the doctor, the medical aid will not pay for the additional days that you are hospitalised.
By medical aids reducing the number of days that you can stay in hospital for certain ailments, you may not always pass the deferred period on your hospital cash back plan before you are discharged. In other words you will not get a cash payout. It is your right to stay in hospital if you so wish and bed are available – but it is not your medical aid’s responsibility to pay for your hospital stay if it is not warranted. Considering the costs of hospitalisation these days, and the demand for upfront cash payment from private hospitals, trying to score on ‘easy money’ through a hospital cash back plan is not worthwhile. Remember that try to fake an illness to score on the hospital cash back payouts is equivalent to fraud, which in other words is tantamount to theft.