Health Insurance vs. Medical Aid vs. Hospital Plans: 5 Key Differences


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Health Insurance vs. Medical Aid

At first glance, it may seem like health insurance, medical aid and hospital plans are all more or less the same thing but you’d be shocked by the answer.

There comes a time in all of our lives when we start to seriously consider our health. And if you were yet to have that health-related ‘aha’ moment, then we can almost guarantee that the current pandemic has given you that much-needed nudge in the right direction.

So, in the spirit of helping you usher in your newfound appreciation for good health, we thought we’d debunk one of the greatest myths circling the medical scheme industry: that health insurance, medical aid and hospital plans are all the same thing.

Quick spoiler alert: they aren’t!

Here’s the thing, if you are considering insuring your health and wellbeing we thought you’d benefit from a quick session with your local insurance geeks (that’s us) where we help you breakdown all you need to know about all three of these medical schemes.

And as the saying goes, knowledge is power, so we’re taking this moment to empower all of you with important need-to-know health information so that you can make an informed decision when it comes to your physical and mental health!

Why you need to understand the differences

We promise to get into all of the necessary (need-to-know) differences between health insurance, medical aid and a hospital plan but first things first: let’s clarify why you need to actually know the difference.

No one should part with their money without the certainty of fully understanding what they are signing up for. Especially given the fact that there are quite a few significant differences between all three. Contractually agreeing to any of these options without fully understanding them means that you run the costly risk of having inappropriate health cover in the moments when you need it most.

So let’s ensure that you make an informed decision by looking at the facts that will help you make the best choice!

Defining the terms

Medical Aid

Medical aid is a type of medical coverage that ensures that you are covered for the majority of your medical expenses. Meaning that if you were to fall ill or need emergency treatment, all of your medical needs will be covered in accordance with your exact policy.

Hospital Plan

A hospital plan is a medical scheme that grants you access to medical attention when you have been admitted into the hospital. Your specific scheme will, therefore, financially contribute to your admission, your stay and your medical bills in accordance with your exact policy.

It is important to note however that hospital plans do not cover out-of-hospital costs. So that means that your GP visits, specialists check-ups and medication will all have to be paid out of pocket!

Now, here’s the thing about a hospital plan. Hospital plans form part of both medical aid coverage and health insurance coverage. What this means is that you can choose to opt for hospital cover only when purchasing medical aid or medical insurance. Hospital plans are typically more affordable, however, you are limited to costs incurred during hospital stays and you are not covered for any day-to-day costs.

Health Insurance

Health insurance is an affordable and comprehensive medical scheme that caters to all budget flexibilities, so regardless of whether you have a little more financial freedom or have a tighter budget, you gain access to private medical attention whenever you need it.

Depending on the cover that you choose, you will also have cover for GP visits, dental care and hospital cover – all in one cost-effective package!

With Oneplan (that’s us), ALL of our plans include cover for day-to-day costs, meaning we help pay the costs of check-ups as well as accidents and illnesses.

Key differences

1.  The price tag

Okay, this is probably going to be the most noticeable difference between all of the medical plans, so you may want to pay attention to this one.

We’ll save you the Google search and let you know that medical aid schemes are more expensive as they come with a heftier monthly premium.

Both hospital plans and health insurance, however, tend to be the more affordable option as they are specifically designed to be easier on your wallet!

2.  The level of coverage

A common misconception is that the only comprehensive medical coverage option is medical aid. But that isn’t exactly true. Yes, medical aid schemes provide you with extensive coverage that covers a variety of conditions and treatments but so does medical insurance.

Medical insurance, however, hones in on your daily health needs, meaning you are granted access to doctors’ visits and short term medication.

Hospital plans, however, focus solely on accidents to medical emergencies at a fixed monthly sum, so if you’re looking for daily benefits this one may not be for you.

3.  Regulatory bodies

Now, this may not exactly influence your decision-making process, but it’s some good-to-know information. When it comes to the legal acts involved with medical insurance you will find that health insurance products are regulated by the Short-Term Insurance Act and governed by the Council for Medical Schemes under Demarcation.

Keen in finding out more about our legal documentation? Tap here!

Medical Aid schemes are however governed by the Medical Schemes Act Regulations and governed by the Council for Medical Schemes.

4.  Varied shortfalls

Medical aid schemes often have shortfalls due to the difference between the Medical Scheme rate and the provider’s tariff. But this information won’t mean anything to you if you don’t know what a ‘medical shortfall’ is? So, let’s have a brief intermission to define the term, shall we?

A medical shortfall is the awkward gap in your medical scheme where certain things are not covered. For example, you may have opted-in for a comprehensive medical aid package however certain medications or specialist visits aren’t covered.

The same medical shortfalls can be seen with hospital plans. While the vast majority of your hospital bills will be sorted, certain procedures may not be covered under your specific policy.

But thankfully all of that ‘shortfall’ talk ends here as we now look at health insurance. This medical scheme can be used as a standalone to cover all of your bases or can be used in conjunction with medical aid because health insurance works to cover any shortfalls that you may have as its coverage has a greater reach!

Basically, health insurance can work as gap cover for when your medical aid doesn’t cover all of your healthcare costs. Which means having both a medical aid and health insurance plan in place will help save you from surprise costs!

5.  Disability and accident cover

Medical aid schemes are not allowed to include any personal accident disability, loss of limbs cover, death and/or funeral cover. This, unfortunately, means that you will need to seek additional cover elsewhere to cover these costs or pay for them out of pocket!

Medical insurance however actively includes non-indemnity cover including accident cover, disability, death and funeral cover. Additionally, health insurance also covers these non-indemnity elements for your entire family too! Another reason why health insurance and medical aid work so well together!

Questions you need to ask yourself

Okay so now that you’re in on all of the medical know-how, all that’s left for you to do is make a decision. But we thought we’d help you out a little more. So, here are a few questions that you should ask yourself prior to making your decision:  

  1. What are my exact medical needs?
  2. What does my budget look like?
  3. To what extent do you need day-to-day cover?

Let’s chat!

Look, the truth is that we absolutely love all of this insurance stuff, but we also understand that if you aren’t in the insurance space it may not always be your cup of tea. With the heavy jargon, lingo and medical scheme options we can see why – it’s a lot to take in. But don’t let that stop you from receiving comprehensive medical care! Our world isn’t as complicated and as scary as it may seem, and we are always here to help you.

Unsure of which medical schemes suits you best? Let’s chat about it!

Not sure how much coverage your budget can get you? We’ve got wallet-conscious options for you!

Need a few insurance terms broken down? We’re happy to explain it!

So even in all of the insurance chaos, there is a plan specifically for you. You don’t even have to go out and look for it or open a new Google tab to find it because we already have it.

All you have to do is tap here and we will send it to you!

Yours in comprehensive health insurance,

The Oneplan Team

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