To stay ahead of ever-rising medical costs, many people are looking for other options to traditional medical aids or hospital plans. One question that people often ask is “what are hospital indemnity plans?”. We will attempt to shed some light on this issue.
Hospital Indemnity Plans are becoming a popular alternative among South Africans.
But, many people still don’t understand the difference between a medical aid and a Hospital Indemnity Plan.
What are Hospital Indemnity Plans and how do they Work?
Though they don’t draw attention to it, most medical aids have limited cover for medical treatments and related expenses. Whether in the form of limits, co-payments or deductibles, most people eventually find themselves reaching into their own pockets to cover the difference in cost between the final bills and the amount that their medical aid pays.
So what are Hospital indemnity plans and what is their purpose? Hospital Indemnity Plans (also known as shortfall or gap cover plans) exist to pay this difference.
Doctor’s fees, costs for lengthy hospital stays, MRI scans and co-payments are just some of the costs that you can expect to pay, despite having a medical aid or hospital scheme.
A Hospital Indemnity Plan will cover these costs so that you are not left with huge bills to pay for your treatment.
What are the limits of Hospital Indemnity Plans?
It is vital that you know the difference between standard medical aid scheme and a Hospital Indemnity Plan.
Unlike medical aid, Gap Cover is an added form of health cover. It pays the difference between what your scheme pays out and how much experts charge for goods and services.
Gap Cover pays for a great number of services. But it will not pay for drug abuse cover, self-harm wounds or unneeded cosmetic surgery, for example.
Members are shocked when they find out about the hidden costs, since they assumed they were covered fully by their medical scheme. Limits on certain operations, co-payments and even hospital items can lead to huge medical bills. Your medical aid only covers a portion of these costs. Which means, you must pay the extra amount. If you have Gap Cover, you won’ have to stress about raising fund in the event of a health crisis.
Further, you must be a member of a listed medical aid before applying for an Indemnity plan.
More about Hospital Plans
Most brokers are willing to offer a Hospital Indemnity Plan even if your medical aid is with another service provider, meaning that you don’t have to change your medical plan just to get the Gap Cover that you want.
Apart from that, limitations and restrictions will differ depending on the chosen scheme. Most plans have an age limit, while others require full disclosures of medical conditions before they will offer you cover.
Most Plans require a waiting period before they will start paying (this is to prevent corrupt people from taking advantage of the cover and then leaving the scheme), but the full cover is usually ready within months of joining.
So if you think that your medical aid may be giving you too little. Or if you would just like to learn more about adding to your medical cover. Speak to an insurance broker about Hospital Indemnity Plans. It will save you money and give you better cover.
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