Understanding hospital cash back plans

Nowadays we have seen a severe increase in the costs of medical treatment. It is now almost impossible for the average South African to pay for decent medical treatment. By investing in a hospital or medical plan will most likely be the only affordable option to receive proper medical attention.

We cannot predict the future, and we have to assume that we will need medical attention in the future. There are two main different types of financial options for medical aid. There is a hospital cash back plan and a comprehensive medical aid scheme. They both have different functions and limitations. In this article I will focus on hospital plans.

A hospital plan is the most popular type of medical aid in South Africa. It is the most affordable as well. A lot of young people will rather get this type of cover than the full medical cover option, because they are still young and healthy and therefore the risk of medical attention is not that great.

A hospital cash back plan is really simple to explain. A hospital plan would pay out a lump sum of money in your bank account when you are in need of hospital funds. The scheme will only pay out the maximum of money that was agreed upon. You can then use that money to pay for your hospital stay. We have also seen that a lot of medical institutions don’t except money from the insurance companies, which means that you have to pay the money from your own bank account. That is why you have to make sure that you know how long your medical aid company will take to make a payment, so that you will know that you will be covered in time.

A comprehensive medical aid scheme is the policy that most of South Africa’s private hospitals and clinics will approve. By getting this option will allow you to receive full coverage, from hospitalisation right down to general check ups by your local GP. The insurance will only cover the costs that are established by the National Health Reference Price List (NHRPL). If the chosen medical institution’s prices are higher than the NHRLP, then you will have to pay the outstanding amount of money out of your own pocket. So make sure that you understand the terms and conditions of the chosen insurer in order to prevent any disputes concerning extra cost etc.

To conclude. It is of utmost importance that you understand the differences between the two different policies. Don’t make the mistake by thinking that you are totally covered by a hospital plan. Do research before approaching any medical insurance company. It is very important to choose the right cover for you and your family.