What is medical aid?
Medical aid is regulated by the Medical Schemes Act. Cover is based on tariff codes and procedures. Higher costs mean a higher level of cover. Premiums are paid per beneficiary or member – so costs increase with each additional member.
Medical aids must, by law, cover Prescribed Minimum Benefits (PMBs). This means providers have to cover a fairly lengthy list of chronic diseases and conditions.
Medical aids have specified yearly limits for use, whether this is for doctor’s visits or hospital visits (which need not be specifically stated in the agreement). Payments for medical treatment are usually made directly to the service provider.
Medical aids do not include any personal accident liability and loss of limbs cover. They are also not authorised to include death and/or funeral cover.
In-hospital benefits are paid according to the National Recommended Price List. A discrepancy often exists between rates a hospital charges and what the scheme covers. This is one of the main reasons people supplement a medical aid with medical insurance cover.
Medical aid plans that offer full coverage of a client are very expensive. Affordable plans do exist, but cover is usually restricted. For example, some plans may cover doctor’s visits and essential medications but not cover hospital bills.
Both medical aid and medical insurance may provide cover for day-to-day medical expenses, such as doctor’s visits and medication. However, medical aids usually offer far more cover when it comes to day-to-day expenses, depending on the plan chosen.
What is medical insurance?
Medical insurance is regulated by the long term and short-term Insurance Acts. As it is not regulated by the Medical Schemes Act, it can legally offer cover for situations medical aids don’t cover. It can be used in conjunction with medical aid cover where a medical aid falls short. Many people today tend to take out medical insurance because the premiums are more affordable than medical aid.
As the name suggests, this type of cover insures health, offering protection in day to day life. It may not fully cover some pre-existing conditions, but it is helpful in the event of accidental injuries or illnesses that occur after taking out the insurance.
It’s more focused on life-changing events, such as a heart attack or stroke, generally covering larger procedures and hospitalisation. Even loss of a salary may be covered in some cases when a person has suffered an accidental injury and is unable to work. The option may also be given to clients to include death and/or funeral cover to a policy.
Normally a set amount is paid out for each day spent in the hospital or a set amount per incident, regardless of the type of treatment the individual needs. Individuals take out cover for a certain amount, and they have to pay out their own pockets if costs exceed this amount. The fixed amounts are paid directly to the member and not to the medical service provider. Members are required to settle their own accounts.
Medical insurance may also cover certain day-to-day expenses, such as doctor’s visits and medication but this is usually much more limited than what’s covered by medical aid.
Deciding whether you need medical aid, medical insurance or both will depend on your medical needs. If you’re young, healthy and unlikely to incur ongoing daily medical costs, medical insurance may be right for you. If you are older and suffer from health issues, medical aid may be a better option. Once you have assessed your needs, compare quotes and benefits online to find a plan to suit your needs.