Few things have better served to highlight how tenuous our health is and the importance of taking every step to ensure it than the Covid-19 pandemic. While the virus proved fatal for many of its victims, far more were confined to a bed in hospital, often for periods lasting several months. For the members of a comprehensive medical aid, most of the related expenses would have been met by the scheme. However, for those unable to afford such extensive cover, a hospital plan could have saved them a fortune or even their lives.
Despite the heroic efforts of those employed by the state-funded healthcare service, it can no longer cope fully with the demands of those seeking treatment in the public sector. Already its lengthy waiting lists are growing longer by the day, and a shortage of costly modern equipment makes it harder to deal with patients once they are admitted. For those formerly reliant on receiving free treatment or paying a nominal fee, comprehensive private healthcare cover may not be an option. However, the hospital plan can offer the less affluent individual a more affordable alternative than the reliance on the ailing public sector facilities.
Medical aid schemes in South Africa must operate as non-profit companies but rely on the same underlying principle of shared risk employed by the country’s insurance companies. That principle assumes that most scheme members or policyholders will make no claims or only small ones during the 12 months of their cover, ensuring there is sufficient cash from premiums to meet the more significant claims of the minority. However, the more cover a company provides, the greater will be the chance of a claim. Consequently, a hospital plan reduces the scheme’s risk by limiting its cover to those periods during which its members undergo treatment as an in-patient.
Historically, the insurance companies were the first to provide a policy that offered financial assistance for hospitalised patients, and they continue to do so today. While the premium price is lower than superficially similar medical aid products, that similarity can be dangerously deceptive. As with any other insurance products, policyholders receive a fixed cash sum. In this case, policyholders receive an equal sum for each day of confinement in hospital. However, whereas a medical aid hospital plan pays most and often the total costs involved, those daily cash payments from an insurer are only intended to compensate partially for lost income or assist with incidental expenses. How much a policyholder will receive each day is determined solely by the value of the agreed monthly premiums but will not come close to covering the total private healthcare costs.
When medical aid schemes first introduced these products, they were targeting young members with good general health. They assumed that hospital plan purchasers could afford the occasional GP visit and prescription charge but not the potentially crippling costs of hospitalisation and treatment following an accident, or if they should require emergency surgery. Today, a growing number of South Africans need to settle for this limited form of cover, and medical aids have had to find ways of extending their value.
In this endeavour, few have been more successful than Medshield. Our range of competitively-priced hospital plans includes many valuable core benefits not available from other schemes. Contact us today to learn more.