The Nature and Purpose of Hospital Plans in South Africa
The need for financial assistance to meet the high cost of private healthcare treatment is a worldwide one and, in most countries, it is being addressed by medical insurance in one form or another. In South Africa, where such costs are much the same as those in countries with a much higher GDP, the solution comprises a choice of hospital plans and comprehensive medical aid products. The former of the two is commonly perceived as a new concept but, in fact, it is simply a revised version of the earliest form of local healthcare cover introduced, not by medical aid schemes that were only established later, but by the nation’s insurance companies.
At the time, these medical insurance policies were both structured and marketed like any other insurance product and thus the amount paid against a claim was determined strictly by the sum assured which, in turn, was based upon the premium charged. The insurer’s obligation was simple; for each day the policyholder spent as an in-patient, they would be paid a fixed cash sum to be used as preferred.
Unlike medical aid schemes, therefore, the sums paid by insurance companies were not based on the actual cost of treatment and today, these fall far short of the amounts required to do so. These products are still available but are now described as hospital cash plans. In South Africa, this serves to distinguish them from the updated products available from medical aid schemes.
An article published by News24 states that the cost of private healthcare in our country has escalated by around 300% over the course of a decade. Inevitably, premium prices have had to be increased to account for this escalation. To their credit, medical aids remain dedicated to finding ways in which to keep those unavoidable increases to a minimum and their products as affordable as possible.
In terms of affordability, there can be no doubt that, in their revised form, the hospital plans developed by medical aid schemes in South Africa offer the cheapest cover available. It should be noted, however, that even though these products offer more realistic benefits that cover every facet of in-patient treatment from accommodation to diagnostics, treatment and care, their benefits remain limited to periods of hospitalisation. This means they are definitely not a suitable option for everyone. For a young, single person in good health, they provide excellent cover in case of emergencies such as an accidental injury or acute appendicitis. However, these limited plans are unable to come close to covering the private healthcare expenses of an average family for a full year.
A hospital plan may be the cheapest option available in South Africa, but there is every chance that it could prove to be a false and possibly dangerous economy for anyone but those for whom it was originally designed. Families need more comprehensive and year-round cover, especially if one of its members may suffer from a chronic illness. With almost half a century of providing private healthcare cover, KeyHealth offers some of the most versatile and comprehensive options available. Combining simple terms and conditions with a focus on reducing costs while increasing core benefits, the KeyHealth range offers affordable products for everyone.