New Members 0861 56 46 66

Existing Members 0860 10 20 10

Hospital Admission 0860 10 62 05

Medical Aid vs Hospital Cash Plan

Medical Aid vs Hospital Cash Plan

Two types of insurance products that are often misunderstood are “Medical Aid” and “Hospital Cash Plan”. These two products are uniquely different from each other. Due to the high cost of hospitalisation, specialists’ fees and other associated medical expenses, it is important that policyholders understand the differences. The table below explains the main differences between a “Medical Aid” and “Hospital Cash Plan”. It is aimed at providing information in general and may be used as a broad guideline for gaining understanding between these two products.





Medical Aid



Hospital Cash Plan

Type of cover Provides mostly unlimited in-hospital cover, as well as   stated benefits for day-to-day medical expenses. In certain instances there may be an   overall annual limit, which is generally around R1 million per annum. Provides cover at fixed or stated amounts of money for   every day that you are hospitalised.
Extent of cover Includes both hospital plans (predominantly in-hospital   cover) and full cover plans (provide in-hospital cover and stated day-to-day   benefits).

Hospital accounts are usually settled in full and related   accounts (doctors and other providers) are settled at the particular scheme   tariff.

In-hospital cover only.

Cash benefits usually range from R200 to R5 000 per day,   depending what plan you are on.

The daily benefit is constant and not linked to the actual   cost of treatment or medical bills.

Hospitals that may be used Hospital benefits range according to the selected benefit   option. In certain instances any   private hospital may be used; in other instances only networks or public   hospitals may be used. The daily benefit remains the same, irrespective whether a   private or public hospital is used.
Availability of cover Pre-existing medical conditions may be excluded for 3   and/or 12 months.

Where no waiting periods are applicable, benefits start   immediately once you are hospitalised, unless specifically stated to the   contrary in the rules of the scheme.

Most plans will cover hospitalisation resulting from   accidental causes from the date of commencement of the policy.

Depending which policy you have, cover for hospitalisation   due to illness commences after either 6 or 12 months.

Benefit starts after a certain number of days spent in hospital   – usually after 2 days.

Cover for Prescribed Minimum Benefits   (PMBs) Yes No
Payment of claims for in-hospital expenses Usually directly to the hospital and other service   providers. Directly to the member, who must in turn settle his/her accounts.
Adequacy of cover Varies from scheme to scheme: hospital cover usually   unlimited but may be capped at a few hundred thousand to around   R1 million. Cover is usually for a fixed rand limit and may not be   sufficient if hospitalisation is for an extended period.
Cost Contributions starting from about R320 per month (low   income earners / benefits limited to network providers) to R8 200 per month   (extended cover). Premiums starting from about R39 per month.
Tax deductibility Tax benefits available within certain parameters.

R270 per month is tax deductible for the first two   dependants & R181 per month for every additional dependant.

No tax benefit.
Eligibility Open enrolment with no age limitation. Cover available for applicants between the ages of 16 – 75.
Applicable exclusions Subject to 3 and/or 12 months waiting periods, no   pre-existing medical condition may be permanently excluded. Pre-existing medical conditions may be permanently   excluded.
Commercial status Medical schemes are non-profit organisations. Short-term insurers are for-profit companies.
Governance Managed by a Board of Trustees. Managed by a Board of Directors.
Regulating Act Medical Schemes Act Short-term Insurance Act
Regulator Council for Medical Schemes Financial Services   Board

Please note that not all aspects have been covered above and the information provided is neither a complete report/analysis nor is it intended to flout or in any other way compromise the conditions set out in the Financial Advisory and Intermediary Services Act’s General Code of Conduct insofar as comparing different financial products with each other is concerned.

LiveZilla Live Chat Software