Page 69 - MEDICAL AND HEALTH INSURANCE

MEDICAL AND HEALTH INSURANCE

In the 'as charged' policies with an overall annual limit, the insurer will

reimburse the actual incurred cost charged by providers for medical

expenses, other than the room and board, subject to the charges being

reasonable and customary. In this instance, the insurer must be mindful of
the limit they offer and the exposure of the risk in giving full 'as charged'

benefits.

The alternatives recommend are as follows:

a) A lower overall annual limit; in most companies there would be

threshold of maximum benefits that the insurer will provide according to
the risk classification. The limits cannot be unlimited for an inpatient

hospitalisation and surgical insurance.

b) To set a sub-limit for surgical and non-surgical benefits within the

overall annual limit; this will curtail over utilisation or abuse, on the overall

annual limit that the Insured will have to be mindful of.

The other types of benefits relate to the traditional inner limit policies,

whereby there is cap on the limit by benefits and this has proven over the
years, to be effective in terms of lower claims paid out as compared to the

as charged' policies. However, should the limits be high, it would not deter

the objective.

With a lower overall annual limit and sub-limits or inner limits benefit plan,
the policyholder will be mindful of exceeding their entitlement as they will

be responsible for the balance beyond their plan limits. In this case, they

will normally seek a physician or hospital for treatment, within their

affordability. This is permitted, as the policyholder has the freedom to

choose their physician and hospital.

In view of the escalating medical inflation, especially on expensive and
changing technology-driven related hospital supplies and services,

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