Medical aid scheme versus medical or health insurance

March 29, 2016 MedQuote

It’s important not to get confused by medical aid schemes and medical insurance. There is a significant difference. 

A Medical Aid Scheme is governed by the Council for Medical Schemes and it’s a non-profit organisation which must according to law cover a list of Prescribed Minimum Benefits (which are the diagnosis, treatment and care linked to a list of 270 health conditions and 25 chronic conditions). It also covers in-hospital treatment according to the set medical scheme tariff and as per the National Recommended Price List.
The rest of the benefits that are part of the different options are determined by the scheme itself and vary in the monthly contributions linked to those options and benefits. 

To find out about gap cover policies and how it can work with your medical scheme , click HERE.

Medical Insurance is a long term insurance product, governed by the Financial Services Act. The client takes out insurance against the risk of incurring certain medical expenses.  It’s important to note that medical insurance covers health events at fixed or very tightly defined amounts and it is paid to the client directly and not to the medical service provider. 

Medical scheme members are often advised to also invest in a complementary medical insurance product such as gap cover. Because medical service providers are allowed to charge more than the medical scheme tariff (up to 500%), a medical shortfall amount could occur, which would be for the patient’s own account. A gap cover policy would cover that shortfall for in-hospital procedures. 

One should however be careful not to only invest in a medical insurance product such as a hospital insurance policy. The initial monthly contribution for hospital insurance could seem to be a lot more cost effective than a medical scheme membership, but hospital insurance cover is fixed pay-outs and will apply cover as set out in the specific policy schedule. It is very important to understand what exactly you are covered for should an unforeseen health incident occur. 

To compare medical schemes based on your specific needs and budget – click HERE

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