Do hospital plans still have merit in South Africa?

Hospital plans have become increasingly popular in South Africa. They provide young and healthy professionals with a backup plan in case of emergencies. As these plans have lower premiums than a comprehensive medical cover requires, they are also affordable.

Hospital plans are not only beneficial for the young professionals alone. They also prove to be helpful for older people, who may require surgeries or hospitalisation from time to time.

In case of hospitalisation you will require aid for room, doctor’s fee, medication etc. Any hospital plan would have these basics covered. However, other than the healthcare expenses, you also have need for day to day household expenses.

Many companies offer the hospital cash back plan as an added benefit to your hospital insurance policy. The cash back plan caters to the out of pocket expenses of the individual and helps pay off fixed expenses of the insured. The reasons for the popularity of hospital insurance are many.

Merits of hospital plans

1. Private hospitals in South Africa are advanced and provide the best care. However, they can be very expensive. Public hospitals, on the other hand, are understaffed and not always adequately equipped. In order to afford the facilities of private hospitals, hospital insurance is vital nowadays.

2. If you avail the facilities of a hospital approved by the insurance company, then your insurance provider can pay the hospital directly. This ensures that you do not have to worry about cash payments from your pockets. Cashless hospitalisation is gaining increasing popularity.

3. Hospital plans are less expensive that traditional medical covers, since they offer more specific benefits than a comprehensive medical cover. The premiums you pay for hospital plans are more affordable for someone who has just started their career. Thus, these plans are most popular with young professionals.

4. Each hospital insurance plan may have additional cover for certain medication. It would be in your interest to ensure you are aware of the medicines your hospital plan covers. You can thus choose the plan that covers the drugs you need.

5. Hospital plans also have the several add-on benefits that can be availed at a nominal cost. One of these add-on benefits is the hospital cash back plan. This plan allows you to save a certain percentage of your premium towards loss of income through hospitalisation.

6. Cash back is a flat rate paid by the insurance company to cover household expenses of the insured. You can also include your dependents in this plan.

Limitations of hospital plans

1. Hospital insurance covers are limited in scope. They provide aid only in case of hospitalisation. Some plans also have the added constriction of a minimum stay at the hospital before pay-out is sanctioned.

Therefore, this plan may not be suitable for a growing family and may be taken as a part of a more inclusive medical aid.

2. Many people do not find the waiting periods imposed by insurance companies very attractive. The waiting period may vary from company to company and depends also on any pre-existing conditions you may have.

It is obvious that hospital plans have merit for the young and the old. However, there can be no substitute for a comprehensive medical aid plan. Hospital insurance plans can however, provide assurance for accidents and sudden illnesses for the otherwise healthy. They are also a cheaper option for people who find medical aid superfluous to their needs.