Is health insurance better than medical aid?
Many people still aren’t clear about the difference between medical insurance and medical aid. The two services have many similarities as far as their benefits are concerned, though there are distinct differences that set them apart, so which cover is better?
Well, the short answer is that it depends on your individual needs.
The amendment to the Demarcation Act explains the factors that make the distinction clear between medical aid and medical insurance.
A medical scheme is regulated by the Medical Schemes Act of 1998 and is required by the law to pay for the treatment of a list of 270 prescribed minimum benefits (PMBs), whether you have an expensive comprehensive plan, or a normal hospital plan. Medical aid schemes also all have to pay for the treatment of 26 chronic conditions.
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 conditions include events like hospitalisation 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 is stolen.
If you do suffer from a pre-existing condition, both a medical aid and medical insurance policy will have a specific waiting period before you can benefit from the provider for that specific ailment.
Both Medical Aid and Medical Insurance can provide cover for day-to-day medical expenses such as GP visits and medication.
There are many factors that have to be taken into account in order to say that one is better than the other, because whether you choose medical aid or rather medical insurance depends what you need.
When choosing between the two options, ask yourself the following questions:
What is my monthly budget for healthcare?
How many people do I need to cover with my insurance or medical aid, and how much will that cost me?
Do I need day-to-day cover, or is a hospital plan sufficient for my personal lifestyle?
Do I maybe need both?
Be honest with yourself about your needs, versus your monthly income and expenditure and choose an affordable, sustainable option that you can stick to in the long term. And if you can afford it, it is better to have both medical insurance and medical aid. Medical Insurance can be taken out as a stand-alone product or can be used as a top-up product in case your Medical Aid savings run out.
Medical Aid expert, Riana Van Zyl, told Money shop; “If you can afford it, always choose a medical scheme with a plan option that suits your healthcare needs and budget.”
“Make sure you understand the plan option you choose; its benefits and what exactly you are paying for. It is also important to make healthcare part of your financial planning, and as such, you should consult a healthcare accredited financial adviser,” she added.