The Difference Between Health Insurance and Medical Aid

    Health insurance and medical aid in South Africa are two entirely and distinct animals.

    REGISTERED MEDICAL SCHEMES, ALSO KNOWN AS MEDICAL AIDS

    Only government-registered medical aids may market medical aid and hospital plans as such.

    The Medical Schemes Act governs their products. Medical schemes must offer Prescribed Minimum Benefits, particularly relating to a long list of chronic conditions.

    Each medical aid membership is circumscribed by a detailed contract and relates to each medical scheme’s price list.

    Although the medical schemes are non-profit, the companies that run them are highly profitable and charge a fortune to run the schemes.

    Health Insurance and Medical AidOpen medical schemes are open to anyone who can afford them.

    Some open medical schemes include Discovery, Fedhealth, Hosmed, Spectramed, Selfmed, Genesis

    Closed medical schemes are for particular companies or industries.

    Some closed medical schemes are Transmed, Bankmed. De Beers, Engen, Afrox, BMW

    INSURANCE COMPANIES

    Insurance companies may not market any of their products while suggesting that they are medical aid plans or hospital plans. They must refer to their products as Health Insurance or Hospitalisation Cover or similar.

    Claims relate to days spent in a hospital only, or a narrow list of benefits e.g. one GP visit per month per beneficiary.

    Their payouts are unrelated to the actual GP, hospital or specialist cost. For instance, they will pay out R500 a day for a hospital stay. That is regardless of how much per day the hospital stay costs the patient. They market the money as meant for other costs incurred when one is in a hospital, e.g. babysitters taxi fares, groceries for home, cell phone bills, etc.

    Some insurance companies offering health insurance are Clientele, Affinity Health, Essentialmed, OnePlan, Day 1 Health.

    GAP COVER

    Offered by insurance companies only. Products cover the difference between what the registered medical schemes pay out and the actual amount on the hospital and specialist bill.

    Medical aid operators hate medical gap cover because people sign up for cheap hospital plans and then cover the shortfall with cheap gap cover. The latest legislation has not cured the problem for medical aids. Gap cover still works, and thousands of people are signing up for it.

    HEALTH INSURANCE AND MEDICAL AID

    Now that you know the difference between the two, please go ahead and click on the banner to apply for health insurance.