What Does "Hospital Plan" Really Mean?

By the end of this guide, you should understand:

• Why "hospital plan" can be a confusing term.
• The difference between a medical-scheme hospital option and hospital-related health insurance.
• Why a hospital-related insurance benefit does not necessarily pay the full hospital account.
• Why a hospital stay can result in several separate healthcare accounts.
• Why authorisation does not automatically mean that every cost will be paid.
• What you need to investigate when looking at hospital-related healthcare funding.

The term hospital plan is commonly used in everyday conversation and marketing.

However, it does not identify one specific type of healthcare funding arrangement.

Someone using the words “hospital plan” could be referring to:

• a hospital-focused benefit option offered by a registered medical scheme; or
• an insurance policy providing hospital-related benefits.

The distinction matters because the two arrangements operate differently and are subject to different rules.

Some registered medical schemes offer benefit options that focus mainly on hospital and major medical expenses rather than providing extensive day-to-day benefits.

These are often informally called hospital plans.

They remain medical-scheme benefit options.

Members pay contributions to the medical scheme, and benefits are provided according to medical-scheme law, the scheme’s registered rules and the selected benefit option.

Importantly, every registered medical-scheme benefit option must provide the Prescribed Minimum Benefits (PMBs) required by law.

The particular option may also have rules involving hospital networks, authorisation, co-payments and other benefit requirements.

An insurance policy may also provide benefits connected to hospitalisation.

The benefit depends on the particular policy and could, for example, be triggered by a qualifying hospital event.

This does not automatically mean that the insurer has agreed to pay the entire private-hospital account.

The policy determines what qualifies for a benefit, what benefit is provided and what limits, waiting periods, exclusions or other requirements apply.

This is why understanding the type of product and its actual benefits is more useful than relying on the words “hospital plan” or “hospital cover”.

A hospital admission does not necessarily result in one healthcare account.

Depending on the treatment you receive, separate accounts may come from:

• the hospital;
• the surgeon or treating specialist;
• the anaesthetist;
• radiology;
• pathology; and
• other healthcare professionals involved in your treatment.

These healthcare providers may charge separately and may also charge different rates.

This means that even when hospital treatment is authorised or a hospital-related insurance benefit applies, not every healthcare account or every amount charged will necessarily be paid in full by your medical scheme or health insurance policy.

Depending on your healthcare funding arrangement and the circumstances, some costs may remain your responsibility.

The table below brings the main differences together.

Authorisation may be required for certain planned hospital admissions, procedures or healthcare services.

Obtaining authorisation is important where it is required, but it should not automatically be interpreted as:

“Everything connected with this hospital stay will now be paid in full.”

For medical-scheme members, final payment may still depend on the benefit option, providers used, treatment received, applicable rates, networks, co-payments and other scheme rules, subject to applicable PMB requirements.

For health insurance, the benefit will depend on what the policy provides and whether its requirements have been met.

So before planned hospital treatment, it is useful to understand both:

• What has been authorised?
• What costs could still remain my responsibility?

South Africa’s Constitution provides that no one may be refused emergency medical treatment.

However, as we explained earlier in the Curalern learning journey, access to emergency treatment and responsibility for the resulting healthcare costs are separate questions.

For medical-scheme members, qualifying emergency medical conditions may fall within the PMB framework.

For someone relying on health insurance, the benefits available will depend on the applicable policy and legal framework.

The exact funding position therefore depends on the circumstances and the healthcare funding arrangement involved.

Curalern will explain emergency treatment and healthcare funding in a dedicated guide.

Before comparing prices or benefits, establish:

• Is this a medical-scheme benefit option or a health insurance policy?
• Who is responsible for providing the benefits?
• What hospital-related benefits are provided?
• Which hospitals and healthcare providers can you use?
• Are networks involved?
• Is authorisation required?
• Are there waiting periods?
• What limits, exclusions or co-payments may apply?
• How are separate accounts from specialists and other healthcare providers handled?
• What healthcare costs might you still have to pay yourself?
• What happens if you need emergency treatment?

The most important starting point is to identify the type of healthcare funding arrangement first.

Once you know that, you can investigate the benefits, rules and possible costs that apply to that particular arrangement.

Two products described as hospital plans can have very different monthly costs.

That does not necessarily mean that one is simply a cheaper version of the other.

They may be fundamentally different types of healthcare funding.

Before comparing price, compare:

Type of product → Benefits → Rules → Limits → Networks → Possible out-of-pocket costs

Only then can the monthly cost become a meaningful part of the comparison.

The most important ideas are:

• "Hospital plan" does not describe one specific type of healthcare funding arrangement.
• A medical-scheme hospital option and hospital-related health insurance are different.
• A hospital-focused medical-scheme option remains part of a registered medical scheme.
• Health insurance provides the benefits set out in the insurance policy.
• PMB requirements apply to medical-scheme benefit options, not health insurance policies.
• A hospital stay can result in several separate healthcare accounts.
• Authorisation does not automatically mean that every hospital-related cost will be paid.
• Networks, waiting periods, limits and other requirements may apply.
• Both medical-scheme members and people with health insurance may still have healthcare costs to pay themselves.
• The type of product should be established before comparing benefits and prices.

You now understand why the words “hospital plan” can refer to different healthcare funding arrangements and why identifying the type of product is so important.

From here, the Curalern learning journey can explore the individual rules and concepts that affect medical-scheme benefits and health-insurance benefits in greater detail.

These will include subjects such as PMBs, waiting periods, networks, authorisation, co-payments, medical savings accounts and other healthcare funding concepts.

We’ll take it one step at a time.

Return to the Curalern Knowledge Centre