Medical aid, be it a hospital plan or comprehensive cover, and a hospital cash back plan are two different financial products. As a medical aid member you are allowed to also have a hospital cash plan and vice versa. However, the purpose and benefits of each should not be confused. Neither product can replace the other and ideally you should have both forms of cover for maximum benefit. These two specific products are not combined into one and you will have to sign up for each separately. Medical aid cover can be purchased from a medical scheme while hospital cash back plans are available from insurance companies.
Medical Bill Payments
A medical aid pays for your legitimate medical bills that you accrue with a doctor or other health practitioner, pharmacy or in hospital. It does not pay you cash in your hand. In fact when a medical aid makes a payment to the member directly and not to the provider, this is either to reimburse you for cash you paid to the provider or for you to make the payment to the provider on your own. The money is never yours to keep unless you have already paid the provider out of your own pocket. Medical aids are a financial net to save you from the exorbitantly high private health costs in South Africa. It is not there to enrich you or compensate you for your inconveniences.
Cash for You
A hospital cash back plan is also a financial net that puts cash in your hand for every day that you are in hospital. You can spend this money on personal expenses or use it to pay for your medical bills. But remember that a private hospital will not admit you on the surety of a hospital plan. Neither will a doctor or other medical provider accept a hospital cash back plan as a guarantee of payment. If you do not have medical aid then you will have to pay for services rendered on a cash basis. Private hospitals take huge cash deposits to admit you if you are not covered by a medical aid. They will not wait for your hospital cash back plan payout.
Which is better?
As with anything in life, you need to compare similar products or in other words, you need to compare ‘apples with apples’ and ‘oranges with oranges’. A medical aid and hospital cash back plan are two different products and it is not logical to compare one with another in order to decide which is the better option. Both have specific purposes that can benefit you. You have the combination of both covers for the maximum financial and medical protection. Let us consider a scenario that you may find yourself in someday.
You have been experiencing chest pains and your doctor cannot find any immediate problem when you visit him at his surgery. He wants to hospitalise you for a few days for further observation. You are sent to your nearest private hospital but do not have medical aid. The hospital therefore insists that you pay a R10,000 cash fee upfront since each day in hospital will cost at least R2,500 per day excluding other expenses that you may still need to pay at the time of being discharged. You pay the deposit fee and your doctor decides that he wants the opinion of a cardiologist, a medical specialist focusing on the heart and vascular system.
The cardiologist feels that an angiogram is necessary where he can see whether the arteries in your heart are narrowed and to what extent. After completing the tests you are discharged from hospital. You can expect to face a bill as high as R30,000 if not more. If one or more of your arteries were severely narrowed then the cardiologist would have conducted a balloon angioplasty and stenting. If the situation was very serious then you may even need a coronary artery bypass surgery. You may come out of the hospital with a whopping R250,000 bill. Yes, a quarter of a million rand.
Medical aid purpose
A medical aid would cover most if not all of these costs discussed above as per the NHRPL (National Health Reference Price List) and some plans would cover even more. Any shortfall would be paid for by medical aid gap cover which is a top up for your medical aid. If you have a hospital cash back plan then the cash payout from this cover can also make up for any shortfall. But as you will realise, a hospital cash back plan cannot make up for a medical aid. In fact the private hospital will move you to a public hospital if you do not have a medical aid or at least close to R100,000 as a deposit in this scenario.
Hospital cash plan purpose
On the other hand, let us assume that you have sustained a loss of income from being hospitalised for so long. This is where a medical aid is not very helpful but a hospital cash back plan can be financial lifeline. By putting cash in your hand, as much as R5,000 per day, you can cover all your personal expenses, even pay some of your business expenses if you are self employed and rest assured that you have not been financially crippled by hospitalisation. You can even use the hospital cash back plan to partly subsidise your medical bills.