Whichever way you look at it, you simply can’t afford not to have some form of medical cover in place if you live in South Africa. The state of our public healthcare system leaves a lot to be desired, and you would be taking a serious financial gamble if you didn’t have some type of private healthcare insurance to fall back on if you became ill.

However, for a lot of South Africans, times are tough and being able to afford the best medical cover (that would be a medical aid) isn’t always possible. The good news is that many short-term insurance companies have identified the growing need to offer affordable healthcare products to South Africans and they’ve introduced some alternatives.

Let’s take you through your medical cover options:

A Medical Aid Plan

Medical Aids are the most comprehensive form of medical insurance you can get. Strictly speaking, a medical aid isn’t insurance, it’s medical cover offered by a medical scheme which is governed by the Medical Schemes Council of SA.

A medical aid plan will typically cover all the expenses associated with an in-hospital stay (plan type dependent) and it pays for treatment according to the specific medical scheme tariff. You can also opt for a plan that has a Medical Savings Account (MSA). This works like a little bank account with stashed cash in it. Any expenses that fall outside of your hospital stay, like a visit to your GP or Dentist, will get paid from your MSA account.

Medical aid premiums vary in price, depending on whether you only want in-hospital cover or if you also want a Medical Savings Account included in your plan.

Medical aids are also legally obligated to offer prescribed minimum benefits (PMBs). PMBs are a set of defined benefits to ensure that all medical scheme members have access to certain minimum health services, regardless of the benefit option they have selected.

PMBs are a feature of the Medical Schemes Act, and medical schemes have to cover the costs related to the diagnosis, treatment and care of the following: any emergency medical condition; a limited set of 270 medical conditions and 25 chronic conditions.

So, how do you go about picking the right medical aid plan for you and your family?

  1. Start with what you can comfortably afford?
  2. Then work out what you’d need from your medical aid plan? Do you only need to be covered if you land up in hospital or do you also want funds to cover day to day medical expenses?
  3. Then shop around between the different medical schemes to find the best plan for you and your family.

Medical Insurance

If you can’t afford to get onto a medical aid, you have the option of looking into a medical insurance product which is far cheaper, but less comprehensive.

It’s important to note that medical insurance products are sold under a short-term insurance license in South Africa (like your car insurance) and are often marketed as:

  • Hospital cash back policies
  • Health insurance plans
  • ICU and trauma policies

Unlike a medical aid plan, which includes a host of PMBs and basically covers your stay in hospital (up to the agreed tariff rate), a medical insurance product normally pays out a set amount of money for each day you spend in hospital or they offer: a capped amount of cover for each time you are in hospital, a set amount for GP, Dentist visits or casualty visits, and a set amount for pathology and radiology benefits etc.

The premiums are more affordable than a medical aid.

Here are a couple of questions you need to then ask yourself before taking out medical insurance:

  1. What exactly is and isn’t covered in each plan option?
  2. Will the daily payout or the capped benefit amount be enough to cover my hospital stay and is there a capped amount of cover I can claim for per year?
  3. How many days in hospital will the policy cover?
  4. Will any excesses be due for each claim?
  5. Do I need to sit out a waiting period before I can claim?
  6. Will pre-existing medical conditions be excluded?

Remember that insurance companies, offering medical insurance products, within a premium range of R150 – R800 per month can only afford to cover x amount at x cost. Unlike a medical aid that uses the pool of funds from all of its members to structure their benefits, medical insurance companies don’t have that luxury.

Until next time.

The MoneyShop Team