The concern that the Medical Schemes Council (MSC) has with certain types of health insurance, stems from the underlying principles of specifically “Hospital” insurance.
A recent article by Dr Bobby Ramasia, Principal Officer of Bonitas Medical Fund, provides clarity on the matter.
- A hospital plan provides basic, yet important medical cover. It differs from scheme to scheme but in essence includes cover for all in-hospital procedures and check-ups. When medical scheme members are admitted into hospital for a procedure or due to an accident or illness, their expenses are covered within the limits set by their particular plan.
- GAP Cover is insurance that specifically covers the shortfall between specialist charges and the amount paid by the hospital plan. The amount of Gap cover differ from policy to policy. Many consumers purchase GAP Cover in conjunction with a hospital plan to provide for additional cover, as there is often a shortfall between the medical schemes pay-out and the actual tariffs charged by the hospital and specialists. GAP cover can however only be used for specialist service costs and not general healthcare related costs.
- Hospital insurance is governed by the Long- and the Short-term Insurance Acts, and regulated by the FSB. It provides the policyholder with cash benefits when the insured is in hospital due to illness, accidents or intensive care of convalescence. The money need not be used to cover medical expenses – it can be used for any purpose.
It can include personal accident risk cover such as disability and loss of limbs, inability to work, salary protection, death and/or funeral covers.
Hospital insurance does not provide cover specifically for PMBs and contributions are not tax deductible. Consumers should also keep in mind that it is a set amount which might not cover their hospital or medical bills, leaving them financially short.
Although the thought of being paid R5 000 a day while you’re are in hospital could sound appealing for some, it often fall short of the actual costs charged by surgeons, anaesthetists and hospitals.
It often does not kick in until a waiting period of three to five days. In the meantime, the patient will be responsible for settling all the medical bills. Furthermore, not many patients stay in hospital that long.
The main argument against hospital insurance by the MSC is that fraud is rife in this market, with medical practitioners and members of the public conniving to submit fictitious claims.