Let’s discuss your options, when you do decide to opt for ‘private cover’.
YOUR CHOICES
Because of the high cost of Medical Aid cover in South Africa, many families are only interested in obtaining cover for the major medical expenses that can have a long-lasting effect on their lifestyle, such as an extended hospital stay. When they start investigating the costs of these ‘hospital plans’, a huge discrepancy seems to exist.
On the one hand, a hospital plan offered by a registered medical scheme could, for a family of four, range in price from about R2 500 per month, to R4 000 – quite a large chunk out of the family budget! Then you see adverts on TV, offering hospital cash plans (or hospital insurance) from as little as R1 200 per month, for the same family size. The consumer, not having made an in-depth study of the subject, invariably decides to go for the cheaper option. The end result being that only when a claim is submitted, do they realize that they are not covered for the full hospital event.
THE DIFFERENCES
While there definitely is a place in the market for both products, consumers need to be aware of the differences between the two, in order to make an informed decision:
|
MEDICAL AID |
HOSPITAL INSURANCE |
| Regulated by Medical Schemes Council | Short-term insurance product |
| Cannot refuse cover to any individual, irrespective of age or health. | Can refuse cover, or stop cover at any stage |
| Have to cover the full cost of life-threatening conditions, regardless of the cost | Pays only a stated benefit for certain procedures (could be a short-fall in your hospital account) |
| Regulated as to the nature of waiting periods or exclusions | Can permanently exclude certain conditions |
| Pays the hospital / service provider directly | Reimburses the policy holder (service provider not guaranteed payment) |
While a hospital insurance plan is a good policy to have in addition to a medical aid, it is never a good idea to rely on such a plan to fully cover you for a hospitalisation event. Reimbursement from a hospital insurance policy will assist you financially while you recover from your illness, while your medical aid will take care of the cost of the hospitalisation.
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Another important point to take note of is that a medical aid could charge you a Late Joiner Penalty if you are not a member of a medical aid by the age of 35, depending of the number of years you were not part of a scheme. Many younger people opt for hospital insurance plans, and when they want to join a medical aid when they get older, they are then subject to these penalties.
Omega Wealth is a Medical Aid and Wealth financial planning company that specialises in medical schemes & Wealth creation and management . They will be able to advise you on a suitable plan for you and your family – just remember, it is never a good idea to simply go for the cheapest option, and then end up financially compromised when you have to claim.
There are no additional fees or costs.
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