Review of the South African Market for Hospital Cash Plan Insurance

The purpose of this paper is to analyse the effectiveness of HCPs in meeting the cost of health care for low income-earners. There are estimated to be between 1 million and 1.5 million policies in effect, with total lives covered estimated to be 27% of those covered under medical schemes, or 2.4 million people. The majority of policyholders are in the LSM 2 4-7 brackets3, and more than 55% of HCP beneficiaries are concentrated between the ages of 20 – 40 years. There are between 30 and 40 insurers providing HCPs, versus 99 medical schemes and between 15 and 20 Gap cover providers. While the benefits of a HCP are not comparable to those of a medical scheme, low-income South Africans would likely have no alternative product which they could access due to affordability constraints.