What is Hospital Plan Insurance Designed to Offer the Purchaser?
In practice, precisely what is meant by the term “hospital plan insurance” tends to be something of a variable and it is one that will be defined largely by the type of organisation that happens to be underwriting it. Originally, as one might expect, this type of healthcare cover was first introduced by the nation’s long-term insurance companies whose management were quick to identify it as a useful and highly saleable adjunct to their companies’ standard life policy products. It was not too long before the product was also seen as a profitable venture by short-term insurers.
What they offer, however, is not the kind of comprehensive healthcare cover with which many South Africans are familiar today. Instead, what they provide for the insured is a policy that covers him or her against loss of income during periods of hospitalisation and perhaps a few incidental expenses, such as taxis for those family visitors who may be unable to drive. Payment is in the form of a fixed sum paid daily, which falls far short of the actual medical expenses incurred.
By contrast, what is included under the type of hospital plan insurance products compiled by the nation’s close to one hundred medical aid funds today, is substantially different and far more effective. Both products, however, do have one feature in common. Whether issued by a conventional insurer or a medical aid fund, the cover they provide is only valid during those periods when the insured or the member, respectively, is receiving his or her treatment as an in-patient. Where they differ, is that the latter product is structured so as to cover the bulk, if not all, of the total healthcare expense that may arise during the member’s confinement.
Of additional help to the members of a medical aid fund is the fact that its products are required to fully cover any expenses defined as prescribed minimum benefits (PMB). Among other contingencies, this covers treatments for 25 named chronic illnesses, including cardiac failure, diabetes, epilepsy and HIV/Aids. While South Africa’s medical aid funds are mandated by the Council for Medical Schemes to provide such cover, what is or is not included in hospital plan insurance products purchased from a conventional insurer is bound by no such ruling. In practice, no such inclusion of PMB cover is mandated by the industry’s regulatory body, and thus, in most cases, it is likely to be excluded.
Although a little more expensive than the basic hospital cash plans, the medical aid product offers members the peace of mind that even the most costly procedures will be covered. Furthermore, while most products of this type cease to provide cover immediately upon a member’s discharge, some providers, among them KeyHealth, are able to offer their members a highly affordable but more inclusive option that is designed to meet their healthcare needs throughout the year.
At KeyHealth, we understand that there is a limit to what many of our members can afford, but this has not meant that we have lost sight of their healthcare needs. Well-designed products backed by a network of world-class preferred service providers, from clinics and specialists to pharmacies and laboratories, is what to expect from our alternative to basic hospital plan insurance.
