Access to good health care is very important, it is also extremely expensive in South Africa. Having the correct medical aid or medical insurance product can determine the level of hospital care you receive.
Medical Aid or Health Insurance?
Health care is very important and in South Africa the only way to make private healthcare affordable is through medical aid and medical insurance. When you get sick or are diagnosed with a serious medical condition, two things play a big role in your recovery. These two factors are time and quality.
The sooner you get treatment and the better the quality of treatment the better your chances. Medical aid and health insurance products will assist you and your family in making healthcare more accessible.
In our previous article (link) we gave an introduction to some of the benefits, terms and products available that can help you care for your family. With so many products on the market, it is sometimes difficult picking what is best for you.
It is even harder to distinguish between medical aid and medical insurance as they both seem to offer the same thing. We are going to dive into what they both are and help explain the differences in the products.
Medical aid and medical insurance are both products that can help with treatment of serious illnesses and injuries. They do this by either paying your medical bills or by paying you a lump sum to assist you in paying the bills.
What is important about medical aid?
We know that medical aid covers the costs related to healthcare, but how is it different from medical insurance?
Medical Aids have to offer a set of minimum benefits known as Prescribed Minimum Benefits (PMB). By law for a product to be called a medical aid, whether just a hospital plan or the most comprehensive plan, they must offer these minimum benefits. This PMB list includes 271 in-hospital procedures and 26 listed chronic conditions.
If you are interested in the medical conditions have a look at the list here.
Medical aids are also obliged to take on anyone who applies and are only allowed to impose a maximum waiting period of 12 months for cover for a pre-existing condition, depending on the history of cover.
Medical aids generally have very high or no overall annual limits on private hospitalization cover.
What is Medical Insurance?
Medical Insurance products are governed by either short-term or long-term law and not by medical aid regulations. They, therefore, do not have to include the prescribed set of minimum benefits and can impose different waiting-period criteria, as well as, a maximum entry age limit.
They specify the benefits offered and pay out a defined amount towards those said benefits.
To keep these products affordable, they are mostly focused on out-of-hospital expenses such as general practitioner consultations, prescribed medication, basic dentistry and some optometry cover.
A defined limit for emergency hospitalization, stabilization or illness might be included, but this has an impact on the price of the product.
Difference between Medical Aid and Medical Insurance
Medical Aid
Governed by The Council of Medical Schemes
Medical cover is based on the medical scheme tariff
Payments are usually made directly to the healthcare service provider
There is a standardized prescribed minimum benefits list
Does not include additional benefits
There is a waiting period for the overall medical aid cover
If there is a shortfall, the member will be required to cover the price out-of-pocket or through additional medical cover, like GAP Insurance
Medical Insurance
Governed by short-term and long-term insurance products
More affordable than medical aid but offers less in-hospital cover
Payments are made directly to you to settle with your healthcare provider
Medical cover is only provided for certain types of illnesses, injuries or procedures as cover/benefits depend on the member’s health insurance plan
Benefits have their own individual waiting periods
Can include additional benefits, like accident and emergency cover, maternity lump sum benefits and death/funeral cover
So... What's the better option?
Both medical aid and medical insurance offer affordable products but in general medical aid is more expensive but more comprehensive.
The best option is generally to look at an affordable medical aid with gap cover. If affordability is an issue, this is then when medical insurance may be the better option. Medical insurance is generally more affordable monthly, but there are many situations that you can end up in hospital without being covered my medical insurance.
It is always essential to speak to an independent specialist who knows all the products so they can help find the best product for your needs.
Watch out for our next article, we will be looking specifically at medical aid and the different types of plans.
