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Making a decision about cover for your medical expenses can be difficult, especially since there are so many options from which to choose. But the key is to select a plan that best fits your lifestyle. Here’s what you need to know about medical aid and medical insurance to help you make an informed decision.
What is medical insurance?
Medical insurance mainly provides day-to-day cover for out-of-hospital medical services and accidents. With this type of cover, a predetermined amount is available to you, which you can then use for limited, specified medical situations by first filing a claim. This is either a fixed sum of money per day or per annum. Examples of the medical situations you could issue claims for include costs involved with a developing health condition. This includes GP or in-hospital treatment.
Bear in mind that these plans are not obligated to provide cover for prescribed minimum benefits (PMBs). (Prescribed minimum benefits are a collection of defined benefits that ensure all medical scheme members, regardless of the plan they have chosen, have access to certain basic health services.) Medical insurance can also provide cover for accidental injury, death and funerals.
What is medical aid?
Medical aid companies offer various plans called schemes. These schemes are legally required to follow certain rules and regulations, including standard-rate fees and the cover of various PMBs.
These benefits may include treatment for specific chronic conditions, for example chronic medication for heart disease or asthma. Depending on the plan you choose, varying day-to-day cover for trips to the pharmacy and doctor’s appointments is included. Cover for accidents (for example loss of limbs) is not included in medical aid plans.
Here are some of the key differences:
Cover:
- Medical aid is generally more expensive, depending on the plan you choose.
- Medical insurance is more affordable, but generally offers limited cover.
Conditions and treatment:
- Medical aid provides full or partial cover for a specified list of conditions and treatments. Comprehensive cover is provided for dread diseases (e.g. cancer, stroke and heart attacks).
- Medical insurance pays out a limited amount (lump sum) for your general medical needs.
In-hospital:
- Medical aid provides comprehensive in-hospital cover at a variety of hospitals (depending on your plan).
- Medical insurance offers limited in-hospital cover.
Which one is right for you?
Before deciding between medical aid and medical insurance, you need to consider your health needs and budget:
Medical insurance may be a good option if:
- You are generally healthy, without a chronic health condition.
- You rarely go to the doctor and don’t have to cover any medical-related costs for anyone else.
- You have a limited budget and can’t afford medical aid.
Medical aid may be a good option if:
- You have a chronic condition that requires regular doctor and in-hospital visits and prescription medication.
- You have a serious condition or are older (40–65 years old) and are more at risk of age-related health issues such as heart disease, hypertension and diabetes.
- You have to cover medical costs for other family members (your parents, children, spouse).
- You can afford medical aid or your company offers subsidised cover.
Disclaimer: This article provides a guideline for medical assistance programmes that are available. Before making a decision, consider talking to a financial adviser who can help you choose what’s best for you.
For more financial advice, read these helpful articles:
The information is shared on condition that readers will make their own determination, including seeking advice from a professional. E&OE.
References:
- Money Expert South Africa. (n.d.) Are You Looking for Cheap Medical Aid? [online] Available at: https://www.moneyexpert.co.za/medical-aid/medical-insurance-vs-medical-aid/#what-is-medical-insurance [Access date 28 November 2020].
- Elixi. (2019). Medical Aid vs Medical Insurance. [online] Available at:
https://elixi.co.za/medical-aid-versus-medical-insurance-whats-the-difference/ [Access date 28 November 2020].