The range of different medical financial products can at times be confusing to the South African consumer. Medical aid. Hospital cash plan. Health insurance. The fact of the matter is that these are all different products with different benefits. There may be some overlap but each product caters for different eventualities. In order to compare hospital plans you have to realise that each product should be viewed separately. In other words, compare apples with apples.
Types of Hospital Plans
There are two main types of hospital plans in South Africa.
- Medical aid hospital plan
- Hospital cash back plan
Simply, medical aid hospital plans are the in-hospital and chronic medication benefits of a medical aid. It pays for medical bills when you are undergoing diagnostic investigation, monitoring and treatment in hospital. You are not paid any cash.
The hospital cash back plan is an insurance policy that pays you cash for each day that you are in hospital. It does not pay your doctor or the hospital although you can use the cash you receive for your medical bills if you so wish.
Pros and Cons
There are distinct advantages to both types of hospital plans. It is important to bear in mind that these are two different financial products. You need to consider your specific needs and what you want from a hospital plan before making any decision. Both have different advantages and disadvantages. Ideally a person would have both a medical aid hospital plan and a hospital cash back plan if they can afford it. In this way you get the best of both products. Your medical bills are covered by the medical aid while you get cash in your hand from the hospital cash back plan.
Advantages and Disadvantages
- A medical aid hospital plan pays your medical bills while you are in hospital at the NHRPL rate. A hospital cash back plan gives you cash at a flat rate per day as per the policy you purchased. This may or may not be enough for your medical bills.
- Doctors, hospitals and other medical providers accept medical aid as a surety that they will be paid. Hospital cash back plans are not accepted as a guaranteed for of payment for medical bills and the doctor or hospital may request payment upfront if you do not have a medical aid.
- Hospital cash back plans give you cash for the expenses incurred while in hospital, which can also be handy for any loss of income while hospitalised. You can use the cash to pay your medical bills if you so choose. A medical aid does not give you money for each day that you are in hospital.
- A medical aid hospital plan in South Africa starts from about R600 per month and pays for bills in private hospitals. Cheaper plans restrict you only to certain hospitals. A hospital cash back plan costs as little as R100 per month but will not cover the medical bills when you are hospitalised in a private hospital within South Africa.
- Medical aid hospital plans usually pay for chronic medication as well, ensuring that you have access to appropriate services for treating and managing your chronic disease for life even when you are not hospitalised. With hospital cash back plans, you are only reimbursed when you are in hospital and there is no benefit relating specifically to chronic disease and its treatment.
- Pre-existing conditions are subject to exclusions for a period of one year on medical aid. This means that the scheme will not cover bills related to these diseases in the first year of membership. However, patients can then enjoy full cover for these pre-existing disease after the waiting period. There are no differences in monthly contributions whether you have a chronic disease or not. Hospital cash back plans also imposed waiting periods for reimbursement for pre-existing diseases. The insurance premium can vary between people with different chronic diseases.
Last updated 2 July 2012