I often get this question, so I thought it would be a good idea to tackle the subject and iron out a few of the misconceptions floating around.
Medical aid schemes nowadays have (2) core pillars of cover:

• Out of hospital coverage (covers your day-to-day medical expenses like GP visits, medication etc), and then
• In-Hospitalisation cover (covering the expenses incurred while you are admitted in hospital).

The latter is the really, really important bit of cover because landing up in a private hospital nowadays will cost you a fortune. Without appropriate cover it could literally mean bankruptcy.

So the question is simply this –

If you opt for a medical aid scheme plan that only covers hospital expenses isn’t it simply hospital insurance? Or is that something completely different?

At some stage or another you have probably seen those crummy day time TV adverts where you’ve got a guy (normally a TV personality who is hard up for cash) trying to convince you to phone into a call centre and take up some type of insurance policy.

The specific TV adverts I’m referring too are the guys offering you cash back for every day you spend in hospital. Now, I’m not bashing these products, because they do serve a purpose but it’s important to note that they are not medical aid hospital plan offerings but rather short term insurance policies. Very different in benefit structure but can go by a similar guise “Hospital Plan” which to the unsuspecting consumer looks like the same thing. Don’t get caught out, they aren’t the same thing.

What you get with these hospital insurance products is cash back for every day you spend in hospital. The biggest problem is that the cash back component they are offering isn’t nearly enough to cover the cost of hospitalization. What happens if you land up in ICU then High Care, then perhaps a general ward? I can guarantee you that the R500 per day these insurance products are promising to pay you back isn’t close to the R10 000 per day you are going to be expected to pay for your stay in ICU. Oh and a general ward bed will set you back R2400 per day.

If you want your in-hospital medical expenses covered in full, you need a hospital plan offered by a registered medical aid scheme. All schemes are regulated by the Council for Medical Schemes so you have that to fall back on if you have problems at claim stage. Medical Aid Schemes also have to pay a set of Prescribed Minimum Benefits (PMB’s) in full regardless of your plan type. Again, this is important because hospital cash back policies aren’t going to offer you that benefit.

The bottom line is that if you want to make sure your hospital plan actually covers your hospital expenses, then a medical aid hospital plan offering is the way to go.

Are you interested in joining a medical aid scheme?

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Until next time.

The InsuranceFundi Team