What is the difference between medical aid and medical insurance?
These days, medical aid seems to be a luxury that is only affordable to the rich. Since medical insurance entered the scene, the number one question asked by the public is, what is the difference between medical aid and medical insurance?
Well, this article is here to explain that as simply as possible.
When searching for an affordable medical aid, one plan might seem better than the other in some aspects, and then lack in the other. For example, one plan might cover doctors’ visits and every day procedures, but doesn’t cover hospital bills. Other plans may fully cover in hospital procedures, but then you have to pay out of pocket for essential meds and doctor visits.
Most people want the cheapest medical aid rates, with most extensive cover. However, medical aid plans that cover the client fully are usually very costly. Then, there is the issue of gap cover, which is there for the parts that all medical aids don’t see to.
Medical aid, which is regulated by the Medical Schemes Act is essentially:
- Cover is based on tariff codes and procedures;
- Often has a shortfall due to the difference between the National Recommended Price List and the South African Medical Association rates which is what healthcare professionals charge;
- Must, by law, cover Prescribed Minimum Benefits;
- Has specified and yearly limits for procedures and health events do not need to be specifically stated;
- Does not include any personal accident disability and loss of limbs cover;
- Is not authorised to include death and/or funeral cover as part of the Medical Aid Scheme; and
- Pays in-hospital benefits according to the National Recommended Price List limiting benefits as per the plan.
Also, then what is medical insurance, and how does it differ?
Medical insurance focuses more on major life events. It may not cover pre-existing conditions, but is helpful in case of accidental injuries, paralysis or illnesses that may occur after you have taken out the insurance.
These include things like hospitalization and larger procedures. If, for example you are covered by insurance and suddenly experience a stroke or heart attack, medical insurance will pay out, in the same way that your car insurance will pay out if your car got stolen.
With medical insurance you are covered for a certain amount, and everything more than that you will need to pay for.
Medical insurance has much more affordable premiums, meaning that anyone can benefit from it. Payments for medical insurance start from as little as R150 per month, whereas medical aid is usually around the price of R1000 and up per member.
Medical Insurance is regulated by the long-term Insurance Act. It:
- May be used as a gap cover in conjunction with your medical aid for cover where your medical aid scheme may fall short;
- Protects your financial assets and promotes wellness and health;
- Covers certain accidental injuries such as disability;
- As a result of accidental injury, can cover your salary when you’re unable to work;
- Gives you the option of including death and/or funeral cover to your plan;
- Covers health events at fixed or stated amounts paid directly to the member as opposed to a medical service provider; and
- Offers stated benefits and an official list giving details of prescribable medicines.
So get savvy about your options. A little bit of research will help you with the discovery of an array of options, all tailored to suit your lifestyle.