Hospital Plans, Comprehensive Medical Aid Options and Health Insurance

Young, fit individuals or those who have just started a family might find a hospital plan sufficient medical cover. In fact, these are the most affordable type of cover. That is why more and more people are selecting these health insurance products, as opposed to fully fledged medical aid options from a medical scheme. Do not feel inferior if you regard a traditional medical aid options as a luxury. Only the highest earners can afford them.

Lower-earning people have become quite creative about their medical cover. Many people take out hospital cover and then manage their own day-to-day expenses via a medical savings account or medical credit and debit cards. It works fine if you discipline yourself to one of these medical aid options.

However you should be aware that hospital plans are very different from medical aid options.

Hospital Plans v Medical Aid

Firstly, you have more personal control over hospital plans in the areas of spending.

Secondly, a hospital plan from a medical scheme differs greatly from other hospital insurance. This is because medical schemes are required by law to provide a certain proportion of Prescribed Minimum Benefits (PMBs) in accordance with the Medical Schemes Act.

Your first port of call when looking for any type of medical cover should be the open medical schemes, which are open to all South Africans. These include Genesis, Discovery Health, Selfmed, Medshield, Bonitas, Fedhealth, Medihelp, Bestmed and several others.

Let us take a closer look at the different kinds of medical aid options available in South Africa and how they differ from each other:

Hospital plans: These are kind of midway between medical insurance and comprehensive medical aid options. This relates to the level of cover they provide as well as the cost to the members. A hospital plan is an ideal choice for young, fit people looking for complete health cover for major medical expenses but not for the day-to-day costs associated with health care. Every open medical scheme has an option for this. Take a look at Liberty Health medical scheme to see what they offer with regard to hospital plans.

Hospital plans from medical aid schemes typically require that you manage your day-to-day medical expenses yourself. This means you will be paying the usual doctors, dentist’s bills and paying for over-the-counts medication. With a hospital plan from a medical aid scheme, your scheme does the actual payouts to the hospital, so you don’t experience administration hassles with hospitals.

Medical insurance: This is simply an insurance policy offered by an insurance company or even a bank underwritten by an insurance company, NOT a medical scheme. All it covers is a specified amount per day you are in hospital. The amounts do not relate to medical bills or to the costs of specialists, medication, etc. Or these policies might pay out for a specified procedure only. These are incorrectly called “hospital plans” or “cash back hospital plans” but they are not. Read the small print . You will see they are simply straight insurance deals.

In a nutshell, hospital plans offered by medical schemes are preferable to the hazy health-related products marketed by banks and insurance companies. You will have higher levels of cover. Obviously they will cost more than straight medical insurance, but not as much more as you might expect.

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With medical insurance cover you can choose where you want to have an operation and any surplus amount above the price for the procedure gets paid out to you in a lump sum. There are insurance companies that offer cash-back incentives and no-claim bonuses. So there is a “casino” element to medical insurance from insurance companies. You should be aware of this.

A true hospital plan offered by a medical scheme involves negotiations between the scheme and hospital chains to get the best available prices for the patient if the hospital chain in question is used.

Often a good hospital plan from a medical scheme will cover unlimited procedures in hospital and it usually pays standard medical tariffs. If you are involved in a major accident you could be looking at hospital bills of R100 000 or more per person. If you need to be in an emergency ward or intensive care the bill could skyrocket further. If there are complications following an operation, costs could soar even higher. At least a good hospital can give you peace of mind knowing you will be fully covered and won’t simply receive some arbitrary amount of money unrelated to your expenses.

Comprehensive medical aid options: these plans cover absolutely everything to do with your medical expenses. They are, accordingly, expensive.

Hospital plans vs comprehensive medical aid options

The main difference between hospital plans and comprehensive medical aid options is that a fully-fledged medical scheme option covers all kinds of expenses, in and out of hospital – everything from doctors’ visits and medicines to specialists’ fees and hospital stays. Hospital plans do not cover these services. This means that with a hospital plan you need to pay for dentists, medicine, glasses, etc. yourself.

Which is better hospital plan or a comprehensive medical aid option?

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All info was correct at time of publishing