How does a Medical Aid work?

Medical Aid Schemes have one main function in mind; to help people pay for their healthcare needs. Such as hospitalisation, treatments, medicine and other medical-related expenses.

Medical aid schemes are actually non-profit organisations, where resources are pooled by a large number of contributing individuals who can then access this money when they need to pay for various medical expenses. In a medical aid scheme, members pay a monthly amount called a premium or contribution into a “collective pot” that is administered by the scheme. This money is then used to pay out medical claims made by members.

Health care has become hugely expensive.

These days, even a minor operation can have you digging into your long-term savings. The high cost of hospital stays, specialist fees and other medical expenses makes it important to have at least some form of medical cover. But should you consider medical aid or health insurance?

These terms are often used interchangeably but in fact there are significant differences between them. Here we aim to provide all the information you’ll need to make the right choice for you and your family.

Key differences between Medical Aid and Medical Insurance

• Medical Aid is regulated by the Medical Schemes Act, while Medical Insurance is regulated by the Long-Term Insurance Act and Governed by the Financial Services Board.
• This means that medical aids are required to provide a minimum level of cover, while medical insurance companies have more flexibility in what they offer.
• Medical Aid typically covers a wider range of benefits than Medical Insurance. This includes in-hospital and day-to-day care, as well as chronic conditions and Prescribed Minimum Benefits (PMBs). Medical
• Insurance, on the other hand, may only cover specific types of expenses, such as Accidental Hospital Cover.
• Medical aid premiums are higher than Medical Insurance premiums.
• Medical aid claims are typically processed faster than medical Insurance claims. This is because medical aids have a direct relationship with healthcare providers.

Your Individual Needs

Ultimately, the best type of health insurance for you will depend on your individual needs and circumstances.

If you need Comprehensive Cover for a wide range of medical expenses, then Medical Aid may be the best option for you. However, if you are only looking for cover for Accidental Hospitalisation, then Medical Insurance may be a more cost-effective option.