So, you’re looking at hospital plans. How do you choose the most affordable option that suits you best?

Like comprehensive medical aid, a hospital plan is a form of risk-based insurance that covers your healthcare needs, for which you pay a monthly premium.

What’s the difference between medical aid and a hospital plan?

The primary differentiator is that a medical aid covers both in-hospital and day-to-day medical costs, and usually offers a host of value-added benefits such as wellness programmes and dental and optometry benefits. While it’s less costly, a hospital plan only covers your expenses while you are in hospital, so you need to cough up for your visits to doctors and when buying medicine. And even if you go to an emergency room, but are not admitted to the hospital for treatment, you will have to pay for the visit yourself. Yet, even in the world of hospital plans, not all things are created equal. Both medical aids and insurance companies can offer hospital cover.

The insurance option

A hospital plan offered by an insurance company is regarded as a financial product, and therefore not regulated by the Medical Schemes Act. So your cover can be pulled if your claims pile up, or you can be refused cover if the insurance company believes you’re too much of a risk. They are also not obliged to cover the diagnosis or treatment of prescribed minimum benefits (PMBs), which is a lengthy list of chronic diseases and conditions that medical aids have to pay for by law.

Cash-back plans

Then there are those ads you see on TV for hospital cash-back plans. Here the insurance company pays out a lump sum directly to the policyholder for time spent in a hospital, which is typically a predetermined minimum period. Cash-back plans should really be seen as a top-up for your other health insurance, rather than your primary medical cover. Healthcare providers may be reluctant to treat you if this is your only source of cover, as there is no guarantee that you will use the funds to pay your medical bills.

Medical scheme hospital plans

On the other hand, a hospital plan offered by a medical aid falls under the Medical Schemes Act, so you cannot be refused membership and the scheme is obliged to cover your hospital costs as well as prescribed minimum benefits (or PMBs). Some of these hospital plans also come with the additional cover, such as some day-to-day benefits, though these are limited. If there are out-of-hospital benefits linked to your hospital plan, the medical aid probably has a designated service providers (DSPs) network of healthcare professionals or facilities that you are required to use for non-emergency treatment. If you don’t use one of the DSPs, you will be liable for the medical bills or hefty co-payments. This can be a problem if you don’t live close to a doctor or facility on the list. In conclusion, the choice of medical cover is up to you, but given the soaring price of healthcare, a hospital plan is a far better alternative than no cover at all.

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