A Good Hospital Plan could Prevent a Financial Disaster
The hospital plan, offered by many medical aids in South Africa today, may seem like a compromise, but it can actually be a lifesaver – both figuratively and literally. The steadily rising cost of treatments and medication alone has forced many people to seek ways in which to offset the necessary increases to premiums. For some, this could have meant accepting less cover in return for a premium reduction, while others may have forced to withdraw from their schemes altogether and take a chance that their healthcare expenses can be met from their income or savings.
In anticipation of such difficulties, schemes developed modified products and also introduced the hospital plan. In fact, it is probably more accurate to say that the medical aid fraternity re-introduced this type of product, as it was widely offered back in the ‘60s by the insurance industry, albeit in a rather different form. The earlier product was never really designed to meet the cost of hospitalisation, which though far cheaper than today, would still have been a burden on the salaries of the time. Instead, it paid the insured a fixed daily sum during the time spent as an in-patient that might serve to cover incidental expenses and perhaps any loss of income due to prolonged absence.
Better described as a hospital cash plan, insurers continue to offer it in a variety of forms today. By contrast, the products designed for this purpose by the medical aid specialists are based upon a realistic assessment of the actual healthcare costs incurred during a period of confinement. As with the cash plans, it is generally only applicable at such times, as most of the newer products provide little or no cover for the member once he or she has been discharged.
Nevertheless, the fact that these schemes meet the vast majority of all the costs incurred in an emergency provides a valuable hedge against the crippling bills that patients might otherwise face. These revised hospital plans also cover contingencies not directly related to the admission. In this case, that means the prescribed minimum benefits, including treatment for 25 chronic illnesses, now made mandatory for South African medical aid schemes to include in all of their products.
E
ven in this much improved form, this is not a choice that is suitable for everyone. In practice, it was designed with a fairly specific demographic in mind. The ideal candidate for such cover is the young single man or woman with good general health, but whose salaries are not yet sufficient to meet all of their needs. Far less costly than fully-comprehensive cover, the hospital plan offers members the option to use their remaining disposable income to establish themselves, perhaps enabling them to rent their own apartment or to finance a small car. While their general good health means they can cover the occasional need for some OTC medication or a GP visit, their biggest worry – the huge bills surrounding emergency surgery or an accident, is accounted for.
There are, however, ways in which to cover the expense of such emergencies, as well as other health issues that may occur at any time. While many comprehensive products may prove costly, KeyHealth has developed products that offer comprehensive cover, yet cost little more than a hospital plan.
