Is the hospital plan ideal?

There are differences between a hospital plan and a full medical scheme. "There are two main differences," says Johan van Tonder, independent medical schemes researcher.

There are differences between a hospital plan and a full medical scheme. "There are two main differences," says Johan van Tonder, independent medical schemes researcher.

"The first is that on a hospital plan, you have to cover all of your day-to-day out-of-hospital costs yourself, and the second is that hospital plans come at a lower cost than medical schemes.

"Your medical needs should be considered first and foremost," according to Van Tonder. "If you are healthy and do not suffer from any chronic diseases, a hospital plan might be enough.

"However, if you are older, you might be more prone to chronic conditions, which might bankrupt you if you have no cover for out-of-hospital expenses."

Consider your family's medical history when making this decision. Also keep in mind that the onset of a sudden chronic condition could bankrupt you.

Joining a medical scheme later could cost you more, as you might have to pay more as a result of your age and your medical condition. You can also be excluded according to the law, for up to 12 months, from treatment for that particular condition. Many medical schemes have been adversely affected by the exodus of younger and healthier members from full medical coverage options to low-cost hospital plans.

This exodus has meant that the cross-subsidisation of older, sicker members by younger, healthier members, has been reduced. This has contributed to an increase in membership fees.

Other reasons for medical inflation include the government's regulations regarding reserves of medical schemes, the list of prescribed minimum benefits, and the fact that medical schemes may no longer turn down new applicants.

The cost of imports of medical equipment is also affected by currency fluctuations. All of these regulations are aimed at protecting medical scheme members, but a few of them have contributed to high medical inflation. The days are gone when being a medical scheme member or being on a hospital plan meant your hospital expenses were covered completely.

If your finances are tight and you have a choice between either a hospital plan or no medical cover at all, the hospital plan is obviously preferable. But if you are in a position to afford full medical scheme membership, it does provide peace of mind, as many of your day-to-day expenses are also covered. - Health24

X