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
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 waiting period, which is a period of time during which you won’t be covered if you need to make a medical claim. Medical aid waiting periods form part of South Africa’s Medical Schemes Act and are imposed to protect medical aid schemes. If these waiting periods weren’t in place, people might only be motivated to sign up for a medical scheme when they found out they were unwell, which would make it very hard to keep schemes financially viable.
What kinds of waiting periods are there?
There are two main types of waiting periods:
General waiting period: This is usually three months in length, depending on the medical aid scheme you join. During this time, you have to pay your normal monthly contributions, but you aren’t entitled to claim any benefits, except in certain instances with claims relating to PMB's
A secondary waiting period: This is usually around 12 months long and is related specifically to treatment for any pre-existing conditions you had when you joined the scheme.
What is the duty of medical aid schemes?
Medical aid schemes in South Africa have a legal duty to be financially sound and this can only be achieved by balancing the risk profile of members. This is because younger and healthier members generally contribute for a reasonable period before they make major claims, and during this time they are subsidising the higher claims of older and more sickly members. This is cyclical, so that when these young healthy members get older, their claims are then subsidised by the younger and healthier members once again.
If people made large claims shortly after joining a scheme, and then cancelled their membership once they were well again, members would find they would have to pay much higher contributions, and the scheme may not be able to function financially at all.
Prescribed Minimum Benefits (PMBs) are a set of predefined conditions that form part of South Africa’s Medical Schemes Act. With PMBs, anyone who is part of a medical scheme, no matter what medical aid plan they’re on, can receive treatment for 270 hospital-based and 25 chronic conditions, and the price of these will be covered in full. The aim of PMB cover is to ensure that the wellbeing and health of South African medical aid members is safeguarded, and that private healthcare is more affordable. 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 whether you’re covered under a PMB. In other words, 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 in terms of in the doctor’s surgery or in hospital.
What kind of conditions does a PMB cover?
You can read the full list of hospital-based PMB 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 right 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 mainly cover the treatment costs if you’re admitted to hospital such as ward costs, theatre fees, and accounts from other in-hospital providers such as anaesthetists or radiologists. Hospital plans also typically cover emergency medical expenses, whether you are admitted to hospital or not. To qualify as an emergency, the condition or event must be unexpected and need immediate treatment, for example treatment in the casualty ward of a hospital, trauma counselling or emergency medical services.
What types of expenses does a hospital plan cover?
Usually, a hospital plan covers the following sets of costs to varying degrees:
The account for hospital costs, such as ward and theatre fees, supplies and medicine dispensed in hospital. In most cases, these hospital costs will be covered in full.
The accounts from doctors and specialists, such as a gastroenterologist if you’re having an appendectomy. These costs will usually be covered in full if they’re in your medical aid’s network of specialists.
Accounts from other providers, such as physiotherapists, x-ray departments. These are covered in different rates depending on your plan and provider.
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. Also, for some treatments and procedures, you’ll need to pay an amount out of your own pocket, which is called a co-payment. These co-payments apply to the hospital bill and are usually paid upfront to the hospital.
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. In contrast, a hospital plan as part of a medical aid scheme covers the costs of in-hospital or emergency treatment you may need. Whether your hospital fees will be covered in full, or whether you’ll need to make a co-payment as part of your hospital plan, will depend on the specific provider you’re with and the plan you’re on.
More about hospital cash back plans
Money from a hospital cash back plan is meant to compensate you for not being able to work and earn money while you’re in hospital, and the amount won’t cover the costs of your medical treatment. These plans usually only pay out from the fourth day you’re admitted to hospital, and you can use the money for anything you want, whether it is affording grocery bills or paying for school fees.
More about hospital plans
Hospital plans like those offered by Fedhealth are one of the most basic, and essential, forms of medical aid. Typically, these kinds of plans mainly cover the treatment costs if you’re admitted to hospital such as ward costs, theatre fees, and accounts from other in-hospital providers such as anaesthetists or radiologists. Many people start out on a hospital plan when they are young, fit and single and don’t foresee many medical expenses. Then, as they get older and have more dependents, they move on to more comprehensive medical aid options.
Medical aid schemes are actually non-profit organisations, where resources are pooled by a large number contributing individuals who can then access this money when they need to pay for various medical expenses. In a medical aid scheme, members pay a monthly amount called a premium or contribution into a “collective pot” that is administered by the scheme. This money is then used to pay out medical claims made by members.
What can you claim for on your medical aid?
Depending on the medical aid plan you’re on, you can claim for in-hospital treatment, as well as other benefits 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.
Who regulates medical aid schemes?
The way medical aid schemes function is governed by South Africa’s Medical Schemes Act – this ensures that your rights as a member of a medical aid are protected, and that you get access to healthcare when you really need it.
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.
No open South African medical aid fund can legally refuse you medical aid membership. Closed medical aid funds on the other hand, which only exist for employees of certain companies for example, are not available to other members of the public and so you will be excluded if you’re not an employee.
It’s important to know however, that medical aid schemes do have the right to charge late joiner penalties or enforce certain waiting periods on new members, which can be up to 12 months for certain pre-existing conditions such as hypertension, asthma or pregnancy. This means that your new medical aid scheme will not pay out any claims that you incur within a certain time period that directly relate to these pre-existing conditions.
What if I’m over a certain age and have never had medical aid?
As mentioned above, many medical aids do charge “late joiner” penalties if you are over a certain age and have never belonged to any medical aid fund, or have had gaps in your previous membership of any medical aid
What if I have no pre-existing conditions?
Even if you don’t have any pre-existing conditions, medical aid companies can impose a general waiting period of three months on you as a new medical aid member, before paying out any claims.
Why can’t I make a claim as soon as I join a medical aid scheme?
It’s important to remember that a medical scheme does not operate for profit. If all its members only joined medical aid schemes in order to immediately make claims, these schemes would not be able to stay solvent. They would struggle to pay out any of their existing members’ claims – even those who’d been contributing with no claims for years and years.
There are strict rules and regulations governing the industry and Fedhealth always abides by these regulations, which were stipulated in the Medical Schemes Act 131 of 1998. With an average of five days in paying out claims, find out more about what sets us apart.
A hospital plan covers you for any medical procedures that are performed in a private hospital, such as if you’re in an accident and need an emergency operation. If you need cover for medical attention given outside of a hospital, like seeing your GP, visiting the dentist or getting new glasses at the optometrist, a hospital plan would not cover these costs – however a medical aid plan would.
Because of this distinction, hospital plans are much cheaper than full medical aid plans, because you get less coverage. Here’s more on these two healthcare options:
A hospital plan requires you to pay a monthly premium that would then cover you for treatments and procedures as an in-patient in a private hospital. Any medication or doctor visits out of hospital would be for your own account. If you need to go into hospital for a planned procedure, you would need to get authorisation from your hospital plan provider beforehand, except in an emergency, when your provider would arrange your admission directly with the hospital.
Many medical aid plans provide both in-hospital and out-of-hospital cover, depending on which option you choose. So you’ll be covered for all the things a hospital plan covers you for, plus day-today medical care, such as going to the doctor and dentist. Depending on your plan though, your day-to-day savings (called your Medical Savings Account or MSA) are limited up to a certain point. So, make sure you do your research before signing up to a medical aid plan, to ensure the limits will be enough for you and your family.
This website and the information contained within it is intended for information and consumption purposes only and does not by any means supersede the Rules of the Scheme. In the event of any discrepancy between this website and the Rules of the Scheme, the Rules of the Scheme will prevail. POPI act compliance information as well as the rules of the scheme are available here - Please click on the rules and annexures / POPI Compliance tab in order to access the documents. Alternatively a copy can be obtained by contacting the Fedhealth customer contact centre on 0860 002 153.