A Meaningful Hospital Plan Comparison Will Require Attention to Detail - Medshield

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A Meaningful Hospital Plan Comparison Will Require Attention to Detail

Posted in Articles   |   July 24th, 2018

Careful comparison should be made before purchasing a hospital plan. A little time spent in careful scrutiny of its precise terms and benefits before making your final selection could mean the difference between a product that provides the cover that is best suited to your needs and one that may fail, perhaps with dire consequences, to do so.

Though having experienced a recent resurgence, the hospital plan product is certainly not a new concept and is among the earliest type of health cover offered in South Africa, usually by long-term insurers as an addition to life policies. Since then, however, both providers and products have undergone considerable change. To begin with, a clear demarcation now exists between the two industries engaged in providing medical-related cover.

While conventional insurance companies continue to offer medical insurance products that pay fixed cash benefits such as their limited hospital cash plans, these show little comparison with the more comprehensive cover offered by the nation’s medical aid schemes. In the case of the latter, even the value of benefits that, by definition, apply only while a member is hospitalised, will be determined according to the actual healthcare expenses and not based on a pre-agreed, daily cash sum. Any appropriate payments are then made to the various service providers responsible for the treatment and accommodation.

In general, a simple medical insurance policy, provided by an insurance company, will prove to be less expensive than the specialised cover for healthcare expenses offered by a dedicated medical aid fund. This is equally true of hospital plans and can be explained given the limitations of the insurance companies’ hospital plan products when compared with the medical aid funds’ fully comprehensive products.  However, a brief comparison of the two will quickly reveal that medical aid schemes offer considerably greater value for those who may wish to invest in this type of cover.

Just as is the case with comparable insurance products, the benefits offered by the medical aid version apply only while a member is hospitalised. However, where they differ is not just in terms of how claims are calculated and the manner in which they are disbursed but also in respect of the contingencies that are covered under its terms. In addition to the variation between these industries, the extent of the cover provided by this type of product may also differ significantly between schemes.

One aspect of a fund’s hospital plan that will require no comparison, however, is the cover provided for so-called prescribed minimum benefits or PMBs. Applicable to all of a fund’s products, this is now a legal requirement entrenched by the Medical Schemes Act of 1998 and incumbent upon all of the schemes that operate in South Africa. While, PMBs are covered only while hospitalised, some fund’s products may offer further concessions such as cover for any medication that may be dispensed upon discharge.

In fact, some of the additional benefits that are now included in these plans could well prove to be game-changers for some families. For instance, while a product may focus mainly on those needs that arise between admission to and discharge from a clinical facility, some also carry additional cover. This might include items such as ambulance costs, basic dentistry, additional maternity, paediatric benefits and other options – all of which mean that choosing a hospital plan should involve some careful comparison.

Although the primary goal in developing these plans was to provide cover for those of limited means, they were also based upon the needs of younger members with sound general health and whose prime concern would be some unexpected event resulting in hospitalisation. As a result, a hospital plan in  its most basic form, I are not the best choice for everyone and some of those additional benefits mentioned could prove to be an essential addition  to the otherwise rather limited cover provided by many of these products.

Extra cover is likely to mean higher premiums, although these remain the most affordable form of healthcare cover. While there may be a lot of truth expressed in the old adage that you only get what you pay for, at Medshield we have gone the extra mile to pack as much as possible into all of our products while employing every means possible to maintain their affordability.

Prompt, fair payments, a solid financial base and 50 years’ experience mean our products withstand comparison with any other hospital plan.

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