Hospital plans aren't all created equal. Here's what you need to know before you make your choice, and what to do when you are ready to make it.
Let's start with the basics. How is a hospital plan different from a medical aid? A hospital plan covers you and your family for expenses incurred when you're admitted into hospital for surgery or other treatment, or in the event of an emergency.
A comprehensive medical aid plan, on the other hand, covers you for both in- and out-of-hospital expenses, funding those from a medical savings account (usually just referred to as an MSA).
Both hospital and comprehensive medical aid schemes are required to cover 25 chronic medical conditions and 270 specific medical conditions via the Prescribed Minimum Benefits (PMBs), which are determined by the Council for Medical Schemes.
Deciding whether you need a comprehensive medical aid or a hospital plan comes down to understanding how much cover you need for out-of-hospital expenses like doctor's visits, blood tests and medicines – not just cost. Hospital plans are often seen as 'cheaper' than comprehensive medical aid cover, but, as with everything, you get what you pay for – and what you pay for should also cover what you might need!
'The medical grounds for considering full medical aid over a hospital plan is influenced by the average amount of money you and your family spend on out-of-hospital costs in a benefit year,' says Alexia Graham, Director of Hippo Advisory Services.
'If your out-of-hospital expenses are generally more than the additional cost of a full medical aid over a hospital plan and you are able to "attain" the full benefits you've paid for in higher premiums in a given year, then it may be worth your while."
She says that if you opt for the more cost-effective hospital plan, it's still important to remember to try to put the amount you're 'saving' by not opting for a more comprehensive medical aid plan, into a savings account to help cover day-to-day, out-of-hospital medical expenses that your hospital plan won't cover.
It's easy to compare the cost and benefits of a hospital plan vs a comprehensive medical aid plan with the Hippo Medical Aid comparison tool. Once you've entered your basic details, you can select the level of day-to-day cover you require, from 'None – I only need a hospital plan' through to 'All – fully comprehensive cover'. If you select 'hospital plan', you'll also be able to determine what type of hospital-plan cover you need, depending on your requirements.
Graham advises that a careful comparison is necessary, not just driven purely by cost: 'The prices for these products vary drastically, so the decision is simply based on a value analysis of the cost of the premium versus your average claims spend in a benefit year.'
So you don't have to base your decision merely on the difference between a hospital plan that costs R1,000 per month and a more comprehensive medical aid that costs R2,000 per month, you need to look at what you actually spend on claims over the course of a year.
If you're healthy and don't often require doctor visits or medication, the R1,000 hospital plan could work for you. But if you're often sick and visit the doctor, you may spend more than the additional R1,000 it would take to 'upgrade' to a medical aid, meaning that a medical aid would actually be more cost-effective to you in the long run.
You've made enough difficult choices this year. Let Hippo help you find the right medical cover for your needs with a few simple clicks!
This article is for informational purposes only and should not be construed as financial, legal or medical advice.