Ask any two people about hospital plans and you’re likely to get three different answers. Take this conversation for example:
“I’m looking for a hospital plan…”
“Sure Ma’am, I can help with XYZ medical aid.”
“No, you don’t understand. I don’t want a medical aid, I want a hospital plan.”
So what exactly is this lady looking for?
Very simple…she, like you and I, wants to know if she ever ends up in hospital, that all her medical expenses get paid. She’s not looking for all the fancy things such as:
- Doctor visits
- Dentist visits, and
Of course in an ideal world she wants those things also included, but hey, when you’re on a budget you have to prioritise, not so?
So is there such a thing as a hospital plan?
Yes, there is but there is also a ton of confusion.
For instance, there are medical aid schemes plans which only cover your hospital stay and chronic medications. These are known as Hospital Plans. Then we have hospital insurance which pays a fixed amount if you end up in hospital. Finally, we have hospital cash-back plans which pay a fixed amount for every day spent in hospital.
So what is the definition of a Hospital plan?
A hospital plan is simply a medical aid without the fancy bits.
Who would want a medical aid plan without the fancy bits? A few people come to mind:
- Think of the guy or girl who can’t afford R5, 000 a month on medical aid in order to enjoy all the fancy bits?
- Or what about the person who’s as healthy as a horse and who hasn’t been to a doctor since the last general election?
If all you want is peace of mind knowing that if something major happens, your hospital expenses will be taken care of, then a Hospital Plan is right up your alley.
If you’re looking for all the bells and whistles such as spectacles, dentistry, doctors, and prescription medicines, then this ain’t the plan for you. What gets frustrating is finding out it doesn’t necessarily pay all your hospital expenses either. For that you might need medical gap cover.
What about hospital insurance?
The best way to explain this is with a car insurance example.
You write your car off, and if your insurance is paid up to date, they pay your claim, correct?
The catch with car insurance is that even if you insure your car for twice its value, they won’t ever pay more than book value for your car.
The same thing applies to hospital insurance. Take for instance the OnePlan Executive option:
You wind up in hospital with some or other illness and they pay out ‘up to R64, 000 per insured event per person (in February 2018) and up to R160, 000 per insured per year’ – not a cent more and possibly quite a few cents less.
One thing about OnePlan is that they pay for doctor, dentist, and specialist visits as well as a host of other services like pathology and radiology. This you ain’t going to get with a Hospital Plan unless you’re in hospital.
However, Hospital Insurance doesn’t guarantee they’ll pick up the full cost of your hospital stay either. For instance, taking the R64, 000 mentioned above. That ain’t going to help much when your hospital bill is on the wrong side of a million Rand!
You have a far better chance of getting to the million Rand by belonging to a medical aid scheme. That’s because a medical scheme is regulated by the Medical Schemes Council, and a scheme’s benefits must bear some relation to the actual cost of the medical procedure. In reality, this doesn’t happen and that’s because the doctors and medical schemes can’t agree on the actual cost for each procedure.
Remember also that medical Insurance is not permitted to perform the function of a medical scheme. They aren’t allowed to ‘poach’ clients from the registered medical schemes since this would destabilise the medical schemes.
And Hospital Cash-Back?
Once again this is a type of insurance plan and is not linked to the actual cost of the hospital stay. These plans pay a fixed Rand amount for every day you spend in hospital.
Take for example Clientele Life. They have a Hospital Cash-Back plan which pays R3, 000 per day spent in hospital but only after the first 72 hours of your hospital stay has elapsed.
Old Mutual also has something similar – called the Old Mutual Insure Hospital Cash Plan – which pays up to R1, 000 a day from day one up to a maximum of 180 days.
Hopefully we’ve helped clear up some of the confusion surrounding hospital plans, hospital insurance, and hospital cash-back plans.
Both Hospital Insurance and Hospital Cash-Back plans are excellent additions to your medical aid scheme membership, BUT they cannot replace your medical aid hospital plan.
How would we prioritise them?
Number one is belonging to a medical scheme even if only a Hospital Plan. This should take care of 90% of your hospital costs.
Number two would be a Medical Gap Cover product covering any potential shortfall not paid by your medical scheme.
Number three would be Hospital Insurance. The mere fact that this sort of plan pays for doctor visits is a big plus. If you keep running out of medical savings then this might be an excellent top-up option along with your medical scheme membership.
Last on our list would be the Hospital Cash-Back plan.
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