Aren’t you worried about not being on a medical aid scheme? Or maybe about not being able to afford a medical aid scheme once you retire?

Problem is, nowadays it’s not only the medical aid scheme you need to worry about…you’ve also got to worry about all the expenses your scheme won’t pick up.
Think about this for a moment – In 2012 the Discovery Health top of the range Executive plan costs R6, 730 per month for a husband and wife – and it only covers up to 300% of the Discovery Health rate. For that price I want breakfast in bed as well!

Look I’m not knocking Discovery Health at all (I’m a satisfied member myself), but every now and again I’m reminded of why everyone needs medical gap cover. Take a quick look at this (It’s number 22 on the list) to see what I’m talking about.

  • The first thing you’ll notice once you download the statement is that the expenses were for the orthopaedic surgeon (R8, 541.60) and the anaesthetist (R3, 465.24).
  • Now check out the claim details. Notice in line 3 that my client was charged R7, 803.00 by the surgeon. The medical aid scheme paid R2, 604.00 of that. Without medical gap cover my client would have had to pay the difference of R5, 199.
  • Medical gap cover ended up paying R12, 006.84 of the doctors’ bills. Who’s got R12, 000 to blow just like that (especially when medical aid is already costing a fortune)?

But medical gap cover (or medical top up cover as some people refer to it) only helps if you already belong to a medical aid scheme.

What if you don’t belong to a medical aid scheme?

That’s where hospital cash plans come in.

  • In order to get paid out, all you need to do is get booked into hospital.
  • No first having to have the procedure authorised by your medical aid scheme.

I recently picked up a brochure for the Chartis hospital cash plan, so I’m going to tell you a little more about what they offer. Let’s kick off with question number one…

For how many days are you covered while in hospital?

Chartis will pay for anywhere between 1 and 180 days in hospital.
Let’s do some quick math…The maximum amount they’ll pay per day is R1, 300. Multiply that by 180 days and you’re looking at R234, 000. Not bad, I’d reckon.

How much cover can you purchase?

You can purchase cover from anywhere between R100 a day up to R1, 300 a day. This is nowhere near the rate charged by private hospitals but it’s still better than nothing.

So how much will it cost you in 2012?

Well, it depends on three things:

  • how many people are joining with you,
  • how much cover you decide to take (R100 to R1, 300 per day), and
  • how old you are

For instance, a single person age 70, who wants cover of R1, 300 per day, would pay R253.01 per month.

Let’s compare that to the cost of them joining a medical aid scheme.

That same 70 old, who has never been a medical aid scheme before by the way, applies for a basic hospital plan.
Now the good news is that the medical aid scheme is not allowed to reject his or her application, but they would apply a late joiner penalty.
For someone who has never been on a medical aid scheme, and who hasn’t been on a medical aid scheme for 25 years and longer, the penalty is a 75% loading.

A well-known medical aid scheme charges around R800 for their bottom of the range hospital plan. Add to that the 75% loading (R800 x 75% = R600), and we now have a cost of R1, 400 per month. For those on a budget, it’s all about R1, 400 versus R253.
If you’re looking after a parent – and on a tight budget – wouldn’t this make perfect sense? Or what about the person who’s concerned about their domestic servant?

I’m not saying that this is an alternative for medical aid, don’t get me wrong. After all, there are some procedures which can cost hundreds of thousands of Rands and which might involve a two week stay in hospital. R1, 300 a day multiplied by 14 days is only R18, 200 – not much help.

But what if medical aid is something which is simply not affordable for you?

Does a hospital cash plan sound like something you might be interested in?

InsuranceFundi has partnered with some of SA’s most reputable insurance and investment companies. We believe that everyone should have access to a wide range of comprehensive and affordable solutions. Pick the product you are interested in below, and expect a call-back from our partners.

Until next time.

The InsuranceFundi Team

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