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Medical Aid Schemes South Africa
Medical aid is an ever changing environment in which you need the right advice to ensure your medical plan suites your individual needs. This is essential because private healthcare in South Africa is very costly.
Medical aid is not the same as medical insurance. Medical aid pays for your normal medical needs and, in most instances, directly for your doctors and other out of hospital costs well as that of your hospitalisation. Medical insurance usually only pays for set benefits or, for instance, for the shortfall in a payment from your medical aid for a specialist charge.
In South Africa we have two types of Products
1. Traditional Medical Scheme
All medical expenses are paid with money from your medical schemes account
- Money in a risk pool
- Limits start fresh each year
- If you don´t use the benefit, you lose
In essence, traditional cover generally means all your medical expenses are paid in full. Whenever you need medical attention or day to day visits to the General Practitioner (GP), it is paid for by the scheme.
2. New Generation Medical Schemes
This product can be divided into TWO:
1. Risk Pool - This benefit covers your hospitalisation and includes uncontrollable expenses or major claims e.g.: major surgery and chronic benefits.
These can be typical low frequency events but high cost items that you really have no control over.
2. Medical Savings Accounts - This benefit cover day to day expenses or controllable expenses.
Day-to day expenses like visits to the GP, Dentist, Optometrists, over-counter medication and other out of hospital benefits is normally paid out of the savings account.
Under these schemes you can have the high risk benefit as a stand alone product, called a hospital plan or a combined benefit between the two, called a full medical plan. In the latter, once your savings are depleted your day to day account falls away.
The diagram below shows how medical aid services are differentiated in South Africa
- Hospitalization - This is the expensive part of the medical aid, commonly known as RISK. Different medical aids pay different tariffs, ranging from 100%-300% of the local charging structure.
- Chronic Medication - The top 25 commonly known chronic diseases must be paid by all medical aid societies. The more comprehensive your plan, the better the chronic benefits will be.
- Day to Day - This benefit is for all out of hospital benefits, such as Doctors, Dentists, Specialists, Optometrists and prescription medication. In this area we have a Traditional Option (set benefits and what you do not use in the year will fall away), and a new Generation Option (medical savings account from which out of hospital expenses are paid. It is an up front Rand value amount and can be carried over to the following year.) Each of these options is divided into different plans, ranging from Hospital plans to Comprehensive plans.
All medical aid companies have an open door policy, so no medical aid can decline your application. Therefore, the medical aid societies need to assess the risks they are taking on. To do so, they may apply the following penalties on application:
On admission to membership a scheme may impose:
- A 3 month general waiting period
- A 12 month condition-specific waiting period, or
- A waiting period on certain prescribed minimum benefits (PMB´s)
- A Late joiner´s penalty - (LJP´s)
The late joiner´s penalties are as follows:
| 1-4 years (of break or not being insured): | 5% | loading on premium |
| 5-14 years: | 25% | loading on premium |
| 15-24 years: | 50% | loading on premium |
| 25+ years: | 75% | loading on premium |
Except:
- A child born to a member
- Change between benefit options
- Termination of membership due to employment or employer changing schemes.
Contact us today to discuss your insurance needs on:
Cape Town – Jan Wink or Cindy Alfino on 27 (0) 21 422 4337
Johannesburg – Paul Sturman on +27 (0)11 234 4275
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