Medical aid is a form of insurance where you pay a monthly amount – called a contribution or premium – in return for financial cover for medical treatment you may need, as well as any related medical expenses. This means that if you fall ill suddenly, are involved in an accident or need emergency treatment, your health needs will be taken care of.
In South Africa, medical aids are governed by the Medical Schemes Act, which regulates the industry in a fair and transparent way. There are 26 different open medical schemes in South Africa and the cover you get will depend on the provider you choose and the type of medical aid plan you’re on.
Your cover will always include a minimum set of benefits (such as in-hospital treatment and treatment of chronic conditions) but if you’re on a more comprehensive medical aid plan, you can also be covered you for medical expenses such as GP visits, dental treatment and prescribed medication.
So how do you pick the right medical aid plan for your needs? Here are a few things to take note of:
- Think about your needs and budget
Are you young, single and healthy? Are you married with small children? Your life stage and needs will influence which medical aid plan you should be on, as well as how much you can actually afford to pay each month.
- Compare all your options
There are so many different medical aids to choose from, so you need to ensure that you’re comparing the same benefits alongside each other, and not simply choosing the cheapest option available to you.
- Note any waiting periods
You should know that some medical aids impose waiting periods when you join – and these can be anywhere from three months general waiting period for all medical expenses to a secondary period where you’re not covered for any pre-existing condition for up to 12 months. So check these before you sign up.
Medical schemes are legal bodies registered in terms of the Medical Schemes Act for the purpose of defraying medical expenses of its members. As such, its sole purpose is to pay claims, not to make profits. In terms of the legislation medical schemes have to be financially sustainable and hold reserves in order to meet unexpectedly high claims, but all of those profits remain in the scheme as the property of the members. No dividends are paid to shareholders. Medical schemes are run by a board of trustees, at least half of which have to be elected by the scheme’s members. This board is responsible for managing the scheme in the interests of all its members.
The concept of a medical scheme is based on the insurance principle whereby risk is spread (a risk pool) amongst a large number of participants, the members and their dependants (collectively beneficiaries).
From a member's perspective, belonging to a medical scheme means that the payment of monthly premiums (contributions) ensures healthcare costs incurred by beneficiaries are paid based on a pre-determined benefit structure.
When you join a medical aid scheme, you have a range of choices for the benefits you’ll receive, such as what kind of doctors and specialists are covered, what procedures are covered, and how much you’re covered for day-to-day medical expenses.
Depending on the level of benefits you choose, you’ll pay a different contribution amount each month. Because schemes belong to the members, any extra funds stay in the scheme and are used for the benefit of scheme members.
There are two types of medical schemes in South Africa:
- Open schemes are open to any South African citizen
- Closed schemes are designed for specific groups of people only, such as employees in a company
Medical aid schemes in South Africa are governed by the Council for Medical Schemes. The council adheres to The Medical Schemes Act (No 131 of 1998), which came into effect on 1 January 2001. Under the Act:
- You should pay a standard fee to join that doesn’t depend on your health or age.
- Medical schemes can’t discriminate on the grounds of your health – such as refusing to let someone join if they are HIV positive or have a heart condition.
- The medical scheme must at least pay for the treatment of 270 predefined conditions and procedures. Together, these are known as prescribed minimum benefits.
- There is a specific complaints procedure you can follow should you have an issue with your medical scheme.
If you don’t want to rely on South Africa’s public health system, getting medical treatment from a private provider can be hugely expensive. Receiving care in a private hospital if you’re ill or in an accident can end up costing thousands or even hundreds of thousands of Rands. Medical aid protects you from having to pay large unexpected sums of money out of your own pocket should you need medical help. It also means you can get treatment quickly, without needing to wait until you have the money available.
When you join a medical aid scheme, you’ll usually be subjected to a period of time after you join where you won’t be covered if you need to make a medical claim. This is known as a waiting period and is usually three months in length, depending on the medical aid scheme you join. Typically there is also a secondary waiting period for treatment for any pre-existing condition you had when you joined the scheme.
Prescribed Minimum Benefits (PMBs) are a set of pre-defined conditions that all medical schemes in South Africa have to cover, by law. They form part of the Medical Schemes Act, with the aim being to ensure that the wellbeing and health of South African medical aid members is safeguarded and that healthcare is more affordable.
The existence of PMBs means that anyone who is part of a medical scheme, no matter what plan they’re on, can receive treatment for 270 hospital-based and 25 chronic conditions and that the cost of these will be covered in full. PMBs also cover any kind of emergency treatment and include certain out-of-hospital treatments.
How does a doctor decide if my condition will be covered by a PMB?
Your doctor will look purely at your symptoms to decide on this, making the decision diagnosis-based. They won’t look at how the condition was contracted in the first place, but rather the symptoms you are displaying at that current point in time. They will then decide where you should receive the treatment, either in the doctor’s rooms or in-hospital.
What kind of conditions does it cover?
You can read the full list of hospital-based conditions covered, which are grouped into 15 broad categories and include things like heart attacks, strokes and pneumonia. The 25 chronic diseases in the PMBs include conditions like epilepsy and bipolar mood disorder – read the full list.
Where can I get help with a PMB related issue?
The Council for Medical Schemes (CMS) was established to supervise medical schemes in South Africa and exists to protect your rights as a consumer to be treated fairly. If you need help with a PMB issue, contact them for guidance.
Depending on the plan you’re on or the healthcare provider you use, your medical aid plan may not cover your entire medical expense. In this case, you may be responsible for a co-payment, which is the amount that you must pay from your own pocket for a particular treatment or procedure as determined by your medical aid scheme.
How much this co-payment is depends on your specific circumstances: whether it’s for an in-hospital procedure, or for medication, and then which hospital and specialist you’re using. If you use network providers only, you probably won’t have any co-payments; if you use an out-of-network hospital or specialist, then you may pay a co-payment. Co-payments are either a percentage of the cost of your medical expense or a fixed amount
As part of the rules set out by the Council of Medical Schemes in South Africa, you’re not allowed to be charged a co-payment for a Prescribed Minimum Benefit (PMB), as long as you use the scheme’s Designated Service Providers (DSPs) or use medicine on the scheme’s medicine formulary. However, if you use a different provider other than the DSP, you may be liable to pay a co-payment as part of the scheme’s rules.
Hospital plans cover only the treatment costs if you’re admitted to hospital. These costs include things like hospital fees, anaesthetists and specialists’ fees for a hospital operation, and medication you’re given while you’re admitted. With a hospital plan, you’re responsible for day-to-day expenses such as a visit to your doctor or buying prescribed medication you may need. Because hospital plans offer a basic level of cover, they’re the cheapest of all medical aid plans available.
It’s easy to confuse the two but they are actually very different forms of cover:
- A hospital cash back plan is a type of insurance where you’re paid out a daily cash amount (usually in a lump sum) should you spend time in hospital. This money is meant to compensate you for not being able to work and earn money while you’re in hospital, and the amount won’t necessarily cover all the costs of your medical treatment, leaving you with a large shortfall that you will have to fund yourself.
- In contrast, a hospital plan is a form of medical aid that covers the costs of in-hospital treatment you may need. Whether your hospital costs will be covered in full, or whether you’ll need to make a co-payment, will depend on the specific provider you’re with and the plan you’re on.
Hospital cash back plans usually only pay out from the fourth day you’re admitted to hospital. You can use this money for anything you want, whether it is affording grocery bills or paying for school fees.
On the other hand, hospital plans are one of the most basic, and essential forms of medical aid. Many people start out on a hospital plan when they are young, fit and single, and then move on to more comprehensive medical aid options as they get older and have more dependants.
In return for paying a monthly amount – called a contribution – medical aid covers you financially for various medical expenses. Depending on the medical aid plan you’re on, these can include in-hospital treatment as well as things like screenings for certain diseases, day-to-day expenses like medication or GP visits, and dental treatment. Medical aid schemes usually require that you use their own network of hospitals and healthcare providers to be fully covered: if you use providers outside of the network, you may be liable for extra charges.
With medical aid savings, part of your contribution is paid into a savings account and is not pooled with other members’ contributions. The money in this savings account is your money and is to be used for your day-to-day expenses such as prescribed medication. The total annual amount in a savings account is made available in advance for that year. In accordance with South Africa’s Medical Aid Act, your savings portion will not exceed 25% of the annual contributions that you pay. Once your savings are used up, you’re responsible for any other medical expenses. If you have any savings left over in a certain year, these are carried over to the following year.
Medical aid gap cover is an additional insurance policy that you can take out over and above your medical aid plan. With this insurance, you pay a monthly fee and in return the gap cover provider pays you out a portion of the difference between what your medical bill is and what your medical aid pays for. In many cases with private hospitals, you may be charged more than what a medical scheme will cover – especially if you use a healthcare provider that is out of your medical scheme’s network.
Medical insurance is a type of insurance where you’re paid a cash amount for each day you’re in hospital. However, you have to have been in hospital for at least three days in order to claim – so if you’re only in hospital for a day procedure, for example, you won’t be eligible for a payout. In addition, the daily allowance you’re paid out is designed to help with everyday expenses and won’t be enough to cover the whole cost of your hospital stay.
Medical insurance is designed to pay you out for daily expenses while you’re in hospital. You need to be in hospital for at least three days, and your daily amount won’t cover your entire medical bill.
Medical aid, on the other hand, is designed to cover all costs involved with being admitted to hospital, including the anaesthetist, any specialists you use, and take home medication. Depending on the plan you choose, your cover for your hospital stay can be unlimited.
Late joiner penalties can be applied by medical aid schemes if you join after the age of 35, or if you haven’t belonged to a medical aid scheme for a specific period of time. Fees applied vary depending on the particular medical aid scheme concerned, but are calculated as a percentage of your monthly contribution.