Hospital Plans vs Hospital Insurance : Knowing the difference
In times of economic pressure , we all relook our monthly expenses to see where we can save on costs but , having access to quality healthcare remains a priority .
When it comes to analysing different healthcare options there can be some confusion around medical aid hospital plans and hospital insurance . Hospital insurance may be cheaper in terms of the monthly contribution , than medical aid hospital plans but it is most definitely not the same product . Our Principal Officer , Lee Callakoppen , helps gives us some insights into the two different products offerings .
Regulation ‘ Firstly , before I take you through the benefits and possible shortfalls of hospital plans as opposed to hospital insurance , it is important to point out that hospital plans are part of the offerings provided by medical aids . This means the hospital plan is regulated and overseen by the Council for Medical Schemes ( CMS ) and in accordance with the Medical Schemes Act 131 of 1998 .
‘ Hospital insurance ( or medical insurance ), on the other hand , is part of the umbrella term which includes health insurance , hospital cash back plans and gap cover . ‘ Hospital insurance is not part of a medical aid and is governed by the Financial Services Board ( FSB ) and the Long-term and Short-term Insurance Act ,’ explains Callakoppen .
Medical Aid Hospital Plans
• A hospital plan provides you with basic , yet important medical cover . The product differs from scheme to scheme but , in essence , this plan is offered by a not-for profit medical scheme and will cover you in hospital for emergencies and planned procedures
• In the case of Bonitas - you also get access to some additional benefits for wellness and preventative care
• The hospital plan ensures that when you are admitted to hospital , for a procedure or due to an accident or illness , your expenses are covered - within the limits set by your particular plan
• There are 27 chronic conditions that all medical aid plans must cover , known as Prescribed Minimum Benefits ( PMBs ) and the medical aid hospital plan also covers these
• A hospital plan does not cover you for other day-today medical costs like visits to the doctor , specialist or medicine
• Your monthly contributions are tax deductible
Hospital Insurance
• Hospital insurance is not a medical aid , it pays you for the time you spend in hospital but not for the treatment you receive
• It provides cash benefits , depending on the number of days you are in hospital due to illness or an accident
• The insurer pays the money directly to you . You are able to use the money however you please - to pay for daily household costs or the hospital , doctors and specialist bills
• This often seems more attractive than a hospital plan and has a cheaper monthly premium . However , the daily amount you receive is often way below the medical expenses incurred while in hospital and you are still responsible for all your in-hospital bills
• It is governed by the Short or Long-term Insurance Acts
• Hospital insurance does not cover Prescribed Minimum Benefits ( PMBs )
• Depending on the hospital insurance option , it may include Personal Accident risk cover such as disability and loss of limbs , inability to work , salary protection , death and / or funeral covers
• Your monthly contributions are not tax deductible
The limitations of hospital insurance
• It is a set amount which might not cover your hospital or medical bills , and , in many cases , there is a waiting period of three to five days
• If you have one of the top plans , the daily payout during your stay in hospital may sound like a lot of money . However , it usually falls short of actual costs charged by hospitals , doctors and specialists . For example , a caesarean birth costs around R30 000 . This can be much more if complications occur
• New regulations state that pay-outs are limited per insured life , per hospital stay with an annual limit
26 Bonitas Member Magazine Issue 4 | 2023