Many people are often conflicted when choosing their health plans. Sometimes it is because the difference between a medical aid and medical insurance is not clear. To some people, the two are the same until they are admitted to hospital. To ensure you make the right decision when choosing your health plan, we spoke to head of compliance at Completemed Healthcare Consultants, Riana van Zyl.

Medical aid

According to Van Zyl, medical aid provides members with cover for expenses associated with necessary medical treatment and is regulated by the Medical Schemes Council.

“Depending on the benefit option you choose, cover could differ. A comprehensive option for example, could cover hospitalisation, chronic medication, dentistry, optometry, GP and specialist’s visits and more,” she said.

Medical insurance

“Medical insurance pays you a fixed lump sum when you need funds for medical purposes. This amount won’t differ, regardless of the type of treatment you need or which healthcare providers you use,” said Van Zyl.

Health insurance is a short-term insurance product and is governed by The Financial Services Act.

Comparisons

Medical aid

Medical Insurance
Less affordable More affordable
Cannot refuse cover to any individual, irrespective of age or health. Can refuse cover or stop cover at any stage
Have to cover the full cost of life-threatening conditions, regardless of the cost (Prescribed minimum benefits) Pays only a stated benefit for certain procedures (could be a short-fall in the hospital account)
Must pay 27 stipulated chronic conditions irrespective of plan type (even on hospital plan) Not regulated to cover chronic conditions
Regulated as to the nature of waiting periods or exclusions – may not permanently exclude conditions Can permanently exclude certain conditions
Pays the hospital or service provider directly Reimburses the policy holder (service provider not guaranteed payment)
Pays from day 1 in hospital Normally starts paying after few days in hospital
Medical tax credits apply Not deductible for tax purposes
Pays all related claims up to scheme or option rate Pays set amount per day in hospital and client must pay the providers from that lump sum.
Doesn’t generally include personal accident disability or cover for loss of limbs. Does include personal accident disability or cover for loss of limbs and might also offer death and funeral cover

Which one is recommendable?

“If you can afford it, always choose a medical scheme, with a plan option that suits your healthcare needs and budget,” Van Zyl suggested.

“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.

Can someone have both?

Van Zyl says it is possible to have both health plans. “Yes, but most people on a medical scheme would rather buy Gap cover,” she added.

Gap cover covers the difference between what service providers charge and what the medical aid cover when you are admitted to hospital.

Until next time,
The MoneyShop.co.za Team