In South Africa, health insurance works differently to the rest of the world. It is important to point out that health insurance and National Health Insurance are two different things.

For the purposes of this article, we will discuss private health insurance, which is paid for by individuals as an optional expense.

Health insurance and medical insurance are the same product.

So, what is it?

Health insurance is a fairly new alternative to the better known medical aid cover. It is similar, as there are day-to-day plans, hospital cover and combined plans available. It depends on the specific needs of the policyholder.

Usually, health insurance offers all three of these cover options with benefits such as unlimited Doctor Visits, subject to primary healthcare referrals, acute medication, Basic Dentistry and Optometry and other specialist visits (within limits, of course).

Most healthcare providers offer a network of medical professionals to choose from. Physicians not included in the list are usually not covered. Medical insurance also covers the cost of chronic medication for many conditions.

However, what sets life insurance apart is the low premium. Lower premiums mean a lower amount of cover. It is there to cover the basics and to protect you against having to fork out large sums of cash in emergency situations.

Hospital

When in hospital, a health insurance plan will pay you out for your stay, instead of paying the hospital directly.

Hospital insurance is not covered by the Medical Schemes Act of 1998. A medical scheme and a hospital plan have to cover you for over 270 Prescribed Minimum Benefits (PMBs) – diseases or conditions for which they are legally obliged to foot the bill.  Medical insurance is not bound by this.

This means that Hospital insurance is not a medical scheme, explains Health24. Insurance plans pay out a set, predetermined amount of cash per day, no matter which medical procedures you’ve had (or how many).