Hospital plan vs Insurance
Know the difference
In times of economic pressure , we all relook at our monthly expenses to see where we can save on costs . However , access to quality healthcare remains a priority - even more so during a global pandemic .
Hospital insurance may be cheaper than medical aid hospital plans but is definitely not the same product . Let us take you through some of the key differences .
Medical aid hospital plans
• Provide you with basic , yet important , medical cover . The product differs from scheme to scheme but is offered by a not-for-profit medical scheme and will cover you in hospital for emergency and planned procedures
• The plan will ensure that when you are admitted to hospital your expenses are covered , within the limits set by your plan
• There are 27 conditions that all medical aid plans cover , even a hospital plan covers these , they are known as Prescribed Minimum Benefits ( PMBs )
• A hospital plan doesn ’ t cover you for other day-to-day medical costs like visits to the doctor , specialist or medicine
• It is tax-deductible based on a percentage of the premiums paid
Hospital insurance
• Is not a medical aid , it pays you for the time you spent in hospital but not for any treatment you receive
• It provides cash benefits depending on the number of days you are in hospital
• The insurer pays the money directly to you and you can use the money however you please
• This often appears more attractive than a hospital plan and has a cheaper monthly premium but , the daily amount you receive is often way below the expenses incurred while in hospital
• It is governed by the Short or Long-term Insurance Acts , which means it is ‘ for-profit ’
• It does not cover PMBs
• Hospital insurance may include personal accident risk cover such as disability and loss of limbs , inability to work , salary protection , death and / or funeral covers
• Is not tax-deductible
Limitations of hospital insurance
• It is a set amount which might not cover your hospital or medical bills and , in some cases , has a waiting period
• New regulations state that pay outs are limited per insured life , per hospital stay with an annual limit
• Typically , people buy the policy that pays less than R1 000 per day
• If you have one of the top plans , the daily pay out during your stay in hospital may sound like a lot , but it usually falls short of actual costs . The recommendation , by most financial advisors , is that a hospital insurance product should be used in conjunction with a medical aid / hospital plan , as an income replacement rather than cover .
Bonitas Member Magazine Issue 3 | 2021
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