Hospital Insurance: Get to know the different types


Did you know you can get hospital insurance? If not, then perhaps the time is now to educate yourself on just how important this tool can be in a time of crisis. You may think this is an unnecessary expense because you are young and (currently) healthy, but the truth is any form of insurance is an important factor to consider.

A disaster can occur at any time and is most likely to create a major financial setback in one’s life. This is usually when insurance becomes your best investment.

When it comes to health matters, it is often that you would find a few people cutting corners, only to realise later they might have needed more cover than they originally anticipated.

Many South African consumers are often left confused when it comes to Medical Aid, Hospital Cash Back Plan, and Health Insurance, as these three products all have different benefits that cater for different eventualities.

With healthcare costs on the rise, many insurance providers have emerged with a variation of insurance options to cater specifically to your budget. There are various levels of hospital coverage available which mainly centre around a Medical Aid Hospital Plan or a Hospital Cash Back Plan, but which onewill suit your lifestyle and your budget?

What is a Medical Aid Hospital Plan?

A Medical Aid Hospital Plan covers your medical bills and pays according to the National Health Reference Price List while you are hospitalised. In other words, a medical aid pays specifically for the cost of medical procedures and medicines.

Advantages of a Medical Aid Hospital Plan

  • A Medical Aid Hospital Plan will provide cover for medical bills, therefore general practitioners and hospitals will accept this policy as surety.
  • The use of South Africa’s private hospitals on medical aid requires a monthly fee of R600 which covers all bills, should you be hospitalised in a private hospital. There are however, cheaper plans which is often restricted to certain hospitals.
  • Did you know that Medical Aid hospital plans usually pay for chronic medication? Medical Aid hospital plans will ensure you have access to the  appropriate medical services to treat and manage your chronic disease for life, even when you are not hospitalised.

Disadvantages of a Medical Aid Hospital Plan

  • While a medical aid is beneficial, it does not give you money for each day in a hospital as a Hospital Cash Back Plan does.
  • When subscribing to a medical aid, it is imperative that you understand how the policy works as a new member. There is usually a 12 month waiting period after you have subscribed before you can enjoy any benefits. Thereafter you may enjoy the full cover of the policy. This is to ensure new members do not join the scheme and drain the pool of funds contributed by the existing members over time.

What is a Hospital Cash Back Plan?

A Hospital Cash Back Plan pays you cash at a flat rate per day, according to the policy you purchased. Be that as it may, the cash received from your Hospital Cash Back Plan may or may not be enough to cover all your medical bills.

Advantages of a Hospital Cash Back Plan:

  • A Hospital Cash Back Plan can be beneficial as you receive cash back for expenses you may incur while in hospital. This can be very handy if you suffered loss of income during your stay in hospital, and you can even use the cash to help cover medical costs.
  • The monthly fee of a Hospital Cash Back Plan is only R100.
  • These policies are much more affordable compared to Medical Aid Hospital Plan and pays a fixed rate for each day spent in hospital.

Disadvantages of a Hospital Cash Back Plan:

  • You may be asked to pay up front whether you are visiting a general practitioner or hospital as this insurance type is not accepted as surety of payment for medical bills.
  • Despite the fact that a Hospital Cash Back Plan costs only a R100 per month, it does however narrow the privileges of being hospitalised and does not cover private hospital medical bills.
  • There are no benefits relating specifically to chronic disease and its treatment.
  • A waiting period applies to Hospital Cash Back Plan too, just like it does with a Medical Aid Hospital Plan. The waiting period refers to reimbursement for pre-existing diseases. This insurance premium can vary between people with different chronic diseases.
  • With a Hospital Cash Back Plan, the daily benefits will only kick in after two or three days.

Deciding how to ‘insure your health’ can be a tricky task to navigate. It is important to weigh the pros up against the cons of each type of insurance to decide which hospital insurance is for right for you.










About Author

Click n Compare's primary aim is to source and provide affordable product options to South Africans for Mobile, Broadband, Banking, Insurance and Travel. Through our independent research of all the markets, we are able to comprehensively provide you with side-by-side comparisons for you to make an informed decision. We believe that access to reliable information and understanding is key, which is why we have formed partnerships with leading brands in the industry. The Future is looking bright for Click n this space.