Medical aid is a form of health insurance cover which pays for essential medical services to registered practitioners, health facilities, clinics and hospitals. This form of private health cover varies from country to country but in South Africa, it is structured as a product referred to as a medical aid. It may provide cover for an individual, couple or family and will protect the member and dependents from the financial impact of private health care costs.
A medical aid is not like other forms of insurance. Medical aids pay for services and products on an ongoing basis and it is not a type of policy that will only mature or payout under certain circumstances. It is nevertheless an insurance product provided by financial service providers with certain policies regarding cover and the payment of services.
How does a medical aid work?
Medical aids collect monthly premiums from all the members of the medical aid. This money is pooled together and paid out for services and products for those members who require it. Therefore only essential services and products are covered.
A medical aid works on the premise that most of its members will be young and healthy and therefore not require any medical treatment. Older patients will be fewer and the medical aid is then able to pay a portion of its reserve for their services. However, in South Africa, this is rapidly changing. The impact of HIV/AIDS among those of working age means that more medical aids are now paying out for services related to HIV opportunistic infections, complications and drugs.
Private healthcare is expensive in any country. In South Africa, the overburdened and poorly managed public health care system (government hospitals and clinics) often means that a patient gets substandard treatment although it is free. A medical aid ensures that a person can access some of the best private medical services in the country for a nominal fee. Monthly premiums are based on a number of factors, including the number of members on the medical aid, age (only if over 35 years old), affordability, and co-payment by the employer.
What are the benefits of a medical aid?
The benefits of a medical aid can be best appreciated when you need it most. If you add up the cost of the monthly premiums, you will find that even if you saved these premiums for years, you could not cover the cost of many surgical procedures. For example – A heart bypass can cost up to R150,000 (2010) and your medical aid will bear the entire cost with no additional payments by you in most cases.
A medical aid provides you with three levels of cover :
Out-of-Hospital (day-to-day) Benefit
This covers the costs of visiting your doctor or auxillary health practitioner (like a physiotherapist), seeing a medical specialist, medicines, tests and other investigations, and products like spectacles (eye glasses) as long as you do not have to be hospitalized. The medical aid may cover this cost in full or in part and in the latter instance, you will have to pay the difference. This depends on whether your doctor or other service provider charges medical aid rates (NHRPL tariffs) or private rates (SAMA tariffs). This part of the cover is usually not unlimited and some medical aids may only pay for services rendered by certain doctors, clinics and hospitals (network plans).
Chronic Cover
This covers the cost of medicines and sometimes consultations for chronic conditions. In South Africa, prescribed minimum benefit (PMB) policy ensures that you are covered for an unlimited amount for 27 conditions – these are usually life-threatening ailments.
In-Hospital Benefit
This portion of your medical aid cover pays for the hospital stay, doctor’s fees, surgical procedures and equipment, medical tests and other auxillary costs associated with treatment in hospital. Most medical aids provide a very large benefit for the in-hospital benefit, with some offering unlimited benefits for hospital costs.
Medical Aid vs Health Insurance
It is safe to say that the South African medical aid structure is superior to private health insurance in other countries like the United States. Medical aids in South Africa do not discriminate against new applicants and while there may be certain restrictions applicable for the first year of cover, any person can join a medical aid and rest assured of full cover, even if you have serious ailments like HIV or cancer.
Private health insurance in other countries will either not cover a person with these conditions or refuse to pay for medical services related to these conditions for an indefinite period. It is not unheard of where Americans have even been refused bypass surgery when their private health insurance company decided it will not cover the condition. South Africans on medical aid do not have to be concerned about these instances after the first year of cover and provided that the medical service is essential.
National health insurance (NHI) is a scheme where the state covers all citizens for medical costs at most private doctors, clinics and even hospitals. It is essentially a type of medical aid sponsored by the state through taxpayer’s contributions and is in existence in countries like Canada, Australia, New Zealand and the United Kingdom. Unlike the current public health system, a person on the national health insurance program will not be forced to only attend public clinics and government hospitals. This system is not as yet in effect in South Africa (2010) and there are doubts whether it will ever reach fruition.
For now, the medical aid system in South Africa is your best option for covering the costs of private healthcare without suffering from significant financial loss even for the most expensive essential procedures.
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