Although there are approximately 80 different medical aids in South Africa, only 21 of them are openly available for anyone to join.
Nevertheless, understanding the terminology as well as what benefits you will be afforded by your scheme of choice can be difficult.
Therefore, this article serves to shed some light on medical aids in South Africa, how they work, what they cover and how they determine the level of coverage they provide.
Firstly, what is a medical aid and what does it do? A medical aid is a type of insurance product which requires a monthly premium in exchange for financial coverage related to medical costs.
What’s important to remember is that each medical aid offers various levels of coverage which are defined in their different plans or options.
Your choice should depend largely on your and your family’s individual healthcare needs and budget.
To make an informed decision, it’s advisable to know and understand medical aid terminology.
A hospital plan is a type of medical aid that covers in-hospital treatment and procedures. This type of plan doesn’t provide any day-to-day or over the counter benefits.
A normal medical aid, based on the type of plan you select, will offer day-today, over the counter, in-hospital and out-of-hospital treatment.
The degree of coverage will depend on the medical aid scheme and plan that you select.
Both hospital plans and normal medical aids provide prescribed minimum benefits.
Many people may become confused about the difference between medical aid and medical insurance which are essentially two different products.
Your medical aid provides in-hospital cover and pays for treatment according to the specific medical scheme tariff.
Medical insurance generally offers limited cover, or a fixed amount for these day-to-day costs for specific nominated procedures.
Medical scheme tariffs (MSTs) refer to the amounts that your medical aid is willing to contribute towards your medical treatments or procedures.
Healthcare professionals are not governed by any legislation which determines their rates. However, medical aids have a predetermined structure (percentage) which sets out the rate that they are willing to cover your medical costs.
Any difference between the healthcare providers rates and the MSTs is known as a co-payment and will be an out of pocket expense that you as the patient will be required to cover.
For example, the MST for a specialist visit is R500 and your medical aid provides cover for 100% of the MST (R500).
However, your specialist charges R1000 for a consultation, creating a shortfall of R500 which will be considered a co-payment that you will be liable to cover.
In the same way, if your medical aid provides cover for up to 200% of the MST of R500, it means that they will cover the full R1000.
Furthermore, some medical aids provide full coverage when you make use of their designated service providers or if these providers have a payment agreement with the medical aid. In this case, the payment structure is rendered irrelevant.
A DSP is a healthcare provider group (doctor, pharmacist, hospital, etc) that is a medical scheme's first choice when its members need diagnosis, treatment or care for a PMB condition.
Should you use a non-DSP for your treatment, it could result in co-payments of up to 30% of the Service providers final invoice.
The Medical Aid Schemes Act ensures that medical aids in South Africa pay for the diagnosis and treatment of the designated 270 conditions, according to specific guidelines, without charging you directly.
Your medical aid should cover treatment for PMB conditions in full and without using your day-today benefits or medical savings.
More information on PMB conditions:
Day to day benefits cover out of hospital care which happen more frequently such as doctors’ visits, prescribed medication, dentistry and optometry to name a few.
These benefits will differ between schemes and according to the plan. Some medical aids don’t provide any day to day benefits at all and focus more on in hospital treatment.
Also known as savings, these are benefits that can be used for over the counter medication which do not need to be prescribed by a doctor.
It’s important to understand the type of OTC benefits your plan offers as some of them are willing to pay for supplements such as multivitamins while others will only pay for schedule 1 and 2 medications (often referred to as self-medication or pharmacist advised therapy).
The types of plans offered by medical aids include the following:
Each of these plans offer various forms of coverage which will vary according to the scheme itself and their guidelines.
Although no medical scheme may refuse to take you on as a member in South Africa, they are entitled to impose what is a late joiner penalty.
Before the Medical Schemes Act of 1998, schemes were allowed to refuse to take on a new
Member based on factors which included age, medical scheme membership history and health status.
Now, medical schemes may only penalise you for joining late by excluding you from treatment for certain conditions for a fixed period of time. This is known as a waiting period.
This may seem harsh, but is a reasonable penalty aimed at circumventing the issue of people only joining a scheme when they fall ill or start to develop age related conditons.
The idea of having a medical aid is to join from a young age, while you are mostly healthy and fit.
Late joiner penalties will also depend on the number of years the applicant had no medical cover at all.
The way in which these are calculated are as follows:
Age upon application minus (35 + years covered previously) + the number of years the applicant was not covered.
A percentage is used to calculate the penalty:
Based on the intricate structures of medical aids and their plans, it’s important to fully understand the fine print so that you don’t sign up for one that isn’t suited to your individual needs.
Becoming a member of one of the medical aids in South Africa is a smart financial move and should be an integral part of your overall financial plan.
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