What is a medical aid?
A medical aid is a form of financial where the medical scheme covers the costs of a member’s medical needs. Should you require medical attention, you can visit a doctor or a hospital and your medical aid will pay for most, if not all, of your medical expenses. In South Africa, your medical aid will often pay your doctor or the hospital directly for your medical expenses provided that your practitioner is contracted into medical aids.
Medical Aid Cover and Law
A medical aid should not be confused with hospital insurance, health insurance or medical insurance plans that are available through insurance companies. Hospital insurance plans reimburse you at a set rate for every day that you are in hospital. This is meant to assist with your daily expenses when you cannot work due to hospitalisation and cannot offer you the same level of protection as a medical aid.
Medical aids differ in their benefits so it is important to understand your options carefully. In South Africa, the market is quite flooded with medical aid providers and it is often difficult to choose the right medical aid and plan for you and your family. Most medical aids provide three main benefits – out-of-hospital (day to day) cover, chronic benefit and in-hospital benefit.
Medical schemes are governed by the Medical Schemes Act No. 131 of 1998 and are regulated by the Council of Medical Schemes. Hospital, health and medical insurance do not fall within the ambit of this law and are also not held liable to provide cover to the same degree as medical schemes. Essentially hospital, health and medical insurance are not medical aid although all of these options cover health-related expenses.
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. All medical schemes are governed by the Medical Schemes Act No. 131 of 1998 and regulated by the Council of Medical Schemes¹.
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 over R 500,000 (2017) and your medical aid will bear the entire cost with no additional payments by you in most cases.
Most of us refer to the cover either as full medical or a hospital plan only but there is more to these benefits.
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).
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.
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 Do’s and Don’ts
Here are a few points to bear in mind when shopping around for a medical aid :
If your company is providing or subsidising a medical aid of their choice, it may be more feasible to opt for this medical aid.
Do not wait too long before joining a medical aid. You may have to pay a late joiner fee if you are over the age of 35 years and certain chronic conditions may be excluded for the first year of cover (read Medical Aid Scheme Exclusion). If you do have a chronic condition before joining your medical aid, make sure that you understand all the restrictions relating to this condition.
Even if a comprehensive medical aid cover is not affordable, at least consider a hospital plan. These options usually provide both a chronic benefit as well as an in-hospital cover which are the most costly of your medical expenses.
Always disclose your full medical history. In the event that your medical aid discovers that there was not full disclosure, you can be held liable for exorbitant medical bills that you had thought would be covered by your medical aid.
Verify whether the medical aid will only pay for certain doctors and hospitals of their choosing or you can choose your practitioner and hospital. Many medical aids have plans that will only pay for medical treatment at specific doctors, clinics or hospitals (network service providers). These plans are often more affordable and you will still get great medical care but it can be inconvenient at times.
Ask your medical aid if they will pay NHRPL (National Health Reference Price List) rates or SAMA (South African Medical Association) rates for your doctors. There is a significant difference between these rates and while all medical aids do pay NHRPL rates, not many may pay SAMA rates. Unfortunately many specialists now charge SAMA rates and you may be liable for the difference.
All medical aids in South Africa are governed by strict legislation so do not believe stories that you may hear about medical aids ‘ripping off’ their clients. The reality is that you get what you pay for like anything else in life and your medical aid will take care of you as per the policy you have purchased.
If you wish to switch over from one medical aid to another, inform both companies accordingly. It is illegal to be on two medical aids at the same time and both medical aids can refuse to pay for your medical expenses if you contravene this law.
You may choose a medical aid based on the lowest monthly premiums but in the long run this may not be value for money. Choose a reputable medical aid scheme and even if you are paying a little more, you may find that some of the perks and benefits of the scheme make it quite a wise buy.
Always enquire about the limit for less common benefits like chemotherapy, implants and psychiatric illnesses. These benefits need to be substantial if you do need to use it.