The Difference Between Medical Insurance and Hospital Plans

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The difference between Medical Insurance and Hospital Plans

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Many people use “medical aid” to define any medical-related policy, but there are differences in medical terms and understanding them may help you make an informed decision.

In this article, we will explore Medical Insurance versus a Hospital Plan, the differences, and the benefits of each.


Distinguishing Medical Insurance from a hospital plan

Medical Insurance also known as health insurance provides access to private healthcare for day-to-day medical needs. This includes access to doctors, optometrists, dentists, medicine, and in some instances, added benefits.

On the other hand, hospital plans cover you for in-hospital expenses whilst admitted to hospital such as theatre, X-rays, blood tests, doctor’s account and other accounts related to your hospital stay. It also covers treatment for conditions defined under the Prescribed Minimum Benefits (PMBs).


How do Medical Insurance and Hospital plans differ in terms of coverage and costs?

Medical Insurance gives you the freedom to access private healthcare and costs less than R500 pm. If you’re young and relatively healthy then medical insurance is something, you should consider. It comes with a number of benefits that work in your favour and will make your day-to-day life easier such as avoiding lengthy queues at the clinic or having to pay out-of-pocket expenses when a sudden illness strikes. With medical insurance, your essential and basic healthcare needs are covered. It also covers the treatment of certain chronic conditions. Some insurance providers have options to enhance your coverage, to suit your health needs. For example, you could add on Accident Cover, to ensure that you’re covered if you have to be hospitalised due to an accident or suffer from a heart attack or stroke.

Medical Insurance claims are paid according to the agreed rate, which means, a set amount will be paid to the healthcare provider for services that they agreed to. So, you don’t have to worry about having cash on hand, as the insurance provider will pay for you.

Hospital plans, as the name suggests, are primarily for expenses incurred due to hospitalisation whether planned or due to an accident. These plan types are suitable if you’re older and due to health reasons need to frequently be admitted to hospital. The most affordable hospital plans in South Africa are less than R2 000 pm, your premium will depend on the plan type selected. Hospital plans are provided by medical schemes and in some instances, you can add on day-to-day benefits such as visits to the doctor or medicine. The medical expenses are paid according to the rules of the medical scheme and the selected plan type.

Both Medical Insurance and hospital plans will require pre-authorisation for certain procedures or visits to be covered, you will need to refer to your policy details for specific requirements. You must also consider that there might be age restrictions to joining a Medical Insurance policy or late joiner fees/penalties for joining a hospital plan when you’re much older.

Medical Insurance and hospital plans are alternative options to medical aid which offers more comprehensive cover but which many South Africans cannot afford.


What policy suits you best?

In South Africa, we are faced with economic problems that have forced us to cut down on costs to make ends meet. But healthcare is one of the things we shouldn’t do without. In fact, this is the time more than ever to invest in private healthcare. This means choosing a policy that best suits your medical needs.



Choosing between Medical Insurance and a hospital plan is a choice all of us need to consider carefully. It needs to be based on not just our financial resources but also our lifestyle, health, and medical needs. We also must consider the added benefits. Once we have considered all the facts with the information provided, we can then make an informed decision on taking care of our health.

Not all Medical Insurance plans are the same and benefits as well as limitations may vary. Descriptions of benefits given are meant to be for general educational purposes only and you must ensure that you seek the advice of a broker to ensure any product choice you make suits your individual needs.

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