Many South Africans are Confused about Hospital Plans
Despite lingering misunderstandings concerning healthcare funding, there is one aspect of this subject on which most South Africans firmly agree – that the majority of the nation’s citizens need help to cover their medical expenses. Today, there are four ways to obtain such assistance:
- The state-funded healthcare service
- Comprehensive medical aid products
- Hospital cash plans
- Hospital plans
Had the state hospitals and primary care services lived up to expectations, there would have been far less need for alternative forms of support. Unfortunately, the public healthcare system quickly became overburdened and continued underfunding has only worsened the situation. The system’s shortfalls led the more affluent patients to seek private care, while businesses sought ways to make this a more affordable option for the less affluent. The nation’s insurance companies were the first to provide such assistance.
Although failing to deliver the benefits offered by genuine hospital plans, the insurance product did offer a degree of financial support for hospitalised patients and continues to do so today. Although these hospital plans are the cheapest form of cover available, there’s a reason for the bargain price tag. These products pay a fixed cash sum for each day spent as an in-patient, and the monthly premium will determine that sum. However, those daily payouts won’t come close to covering the total cost of accommodation, medication and treatment.
Today, medical aid funds offer a choice between fully comprehensive products and hospital plans with more realistic benefits. For example, instead of a daily payout to cover lost income and incidental expenses, medical aid products cover all or at least most of the member’s private healthcare costs. Furthermore, an insurance company may refuse cover to patients it believes might pose a high risk. By contrast, their regulatory body requires medical aid funds to accept everyone, regardless of pre-existing illness.
Although medical aid cover is more extensive than insurance products, it is essential to understand how hospital plans differ from their more comprehensive options. The latter offers members year-round cover for everything, from GP visits and prescription medication to specialist consultations, diagnostic procedures, and
treatment, whether as an outpatient or hospitalised. Scheme managers generally offer a choice of several comprehensive products. Their monthly premiums vary according to the total value of the benefits on offer and the extent of co-payments for the member’s account.
In practice, the primary reason that South Africa’s medical aid fund managers chose to introduce hospital plans was to offer young, single individuals, with sound general health, a means to meet the potentially crippling costs of an unexpected medical emergency. That said, the markedly lower monthly premiums have attracted many others who could not afford the more comprehensive options. Previously, that would have meant they could only claim for in-patient expenses. However, under the terms of the Medical Schemes Act,131 of 1998, all medical aid products must now offer members certain prescribed minimum benefits, including year-round cover for the diagnosis, treatment and care of 25 named chronic illnesses.
For those who choose to join a Medshield hospital plan, there are many extra perks. These include several unique, free core benefits coupled with some valuable selected out-of-hospital cover.
