Hospital cover in South Africa can mean one of two things. You are either talking about a medical aid plan that only has hospital cover and not day-to-day benefits. Or you are looking at an insurance policy that pays cash when you are in hospital. Both these financial products differ, not only in the way it is structured and the nature of the claims, but also by the regulatory bodies that govern the plans.
Hospital cover is becoming the preferred option for your healthcare need for several reasons. It depends at the type of plan that you are looking at but with the increasing private healthcare costs and overburdened public health services, hospital cover in any form has become more of a necessity than an optional cover. We will look at both types of hospital cover in South Africa, the benefits and purpose of each.
Medical Aid Plan
Hospital cover within the context of a medical aid means a plan without the out-of-hospital benefit. It was for many years simply referred to as a hospital plan. However, the growing popularity of the cash payout hospital insurance, it is important that the different plans are clearly identified from each other. For this reason, the term ‘medical aid hospital plan’ is more accurate. It defines the type of cover and the specific level of benefit, in this case cover when in hospital
Medical aid hospital cover will pay for all medical bills that are accrued when hospitalised. This includes the hospital charges, doctors’ fees, investigative tests and medication administered while you are in hospital. The cover will only pay out if the reason you are in hospital is due to some injury or medical condition, meaning diseases or pregnancy. It will not pay for elective procedures and cosmetic surgery which are non-essential.
The rates which are paid from hospital cover depend on the plan. It can be according to the National Health Reference Price List (NHRP) or even higher. Some hospital plans have an unlimited benefit but those which are capped usually have several hundred thousand available for hospital costs. Where the hospital plan falls short, you as the patient have to pay the outstanding amount from your pocket unless you have additional gap cover.
The purpose of medical aid hospital cover is to allow you to afford private healthcare. For the average South Africa, private health services are very expensive within a hospital setting. Medical aid is the only financial lifeline that allows a person access to private health services. Your medical aid hospital plan will pay your service provides – hospital, doctors, laboratories – for the charges pertaining to essential and legitimate medical care.
Hospital Cash Plan
The hospital cash plan is an insurance policy that covers you when you are hospitalised.The amount that you are paid for each day in hospital depends on the level of cover you opt to buy. It is like any insurance policy – a payout is dependent on a specific event occurring. Although a hospital cash plan may fund your medical bills, it is not a medical aid.
A hospital cash plan pays a predetermined amount of money for each day of your hospital stay. The cover only kicks in after a 2 to 3 day deferred period meaning that for the first 2 to 3 days that you are in hospital, you will not receive a payout. The payout is to you, the patient, in cash after you have completed and submitted all the required forms.
A private hospital, doctor, laboratory or pharmacy will not accept the hospital cash plan as a guarantee of payment. Only medical aids are recognised in this regard. Therefore a hospital cash plan should be seen as a handy add-on to a medical aid. Although this type of cover can pay out a substantial sum of money, this may not be enough in the event of major surgical procedures.
By paying out cash to you, this type of hospital cover is intended to serve as a financial net when you are in hospital and unable to work. The money can be used for your personal expenses, your work or business commitments and even to pay off your medical bills. How you spend the money is up to you but it is not intended to match some of the larger hospital bills. It should be seen as a form of financial protection for when you cannot work and still need money to settle you daily bills.