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What are the different types of Medical aid?

Advice on the various benefits, networks and premiums available.

Healthcare is expensive, but so necessary if you want to be able to afford the finest medical care.

In order to find and join the best plan for your needs and budget, you must have a basic idea of what types plans are on offer.

WHAT TYPE OF COVER DO YOU PREFER?

All medical scheme plans offer hospitalisation, day-to-day and chronic treatment benefits. There are various ways to cover day-to-day or out of hospital expenses and it is here where you can save premiums.

In an attempt to fight the high costs of healthcare - but still have protection against high private care expenses - many members are joining only in hospital benefit plans and self-funding day-to-day costs.

There are 3 main options to consider:

1. New Generation, where your day-to-day benefits are paid from a personal medical savings account. A portion of your premium is saved into this fund and only you can spend the monies on your medical needs - there is no cross-subsidiatation amongst other members. Any funds remaining at year-end are carried forward to the next year.

Some schemes offer innovative ways of using these savings funds and you can save a great deal of premiums!

Others offer safety net (threshold benefit) should you have spent the savings.

Some pay dental costs, so you don't use savings on these claims!


2. Traditional: where your claims are paid from a common pool of funds within the medical scheme, for all members of that plan and each benefit category has a pre-defined limit on the amount that will be paid.

This prevents a situation of having used all the benefits on one condition, with nothing left for other healthcare needs - as can happen with saving plans.

These plans use a form of cross-subsidisation to manage claims.
No benefits are carried over into a new year. It is a use it or lose it type cover.


3. Capitated: plans require you to use a network of designated service providers, who are linked to the medical scheme.
For that, you get a discounted premium. (In an emergency you should be able to use any hospital, but please check with the plan rules.)

There are Network plans, with premiums related to your income.
These are the lowest cost medical scheme plans available. However, they can be restrictive in the benefits they offer, but do offer life-threatening and life-sustaining benefits for extremely good rates!

They are ideal for pensioners, children who become adult dependants on your healthcare plan, students and those who earn low-incomes, but want access to private healthcare


WHAT IS A COMPREHENSIVE MEDICAL AID PLAN?

comprehensive medical aid
Comprehensive Plans are designed for members who have high out of hospital or chronic illness, medical costs.

In addition, for families who want the security of knowing high medical costs associated with children are covered and the elderly, who have higher needs for medical treatments.

They include full cover for hospitals, benefits for a number of out of hospital needs, like doctor's, specialists and medication, along with cover for an extensive number of chronic illness.


WHAT IS A HOSPITAL PLAN?

hospital plan
Hospital plans are designed to meet the need for high cost, elective and emergency private hospitalisation and essential chronic illness treatment.

Most medical aids offer these plans.

They offer the best method of controlling medical aid costs, by "insuring " for the greatest medical financial risk we face - private hospitalisation - whilst you self-pay for your day-to-day costs.

They are recommended for those with a strict budget or healthy members who have little need for out of hospital cover.

Benefits include all planned and emergency, in hospital costs from admission to discharge. That includes ward and theatre fees (which are normally fully covered), anaesthetist and surgeon, pathology, physio and other providers.

Unless you are admitted immediately after casualty treatment, most plans do not cover casualty costs.
Here is a plan that does pay casualty ward costs, as well as 30 days post hospital costs for certain treatments and allows an upgrade to a higher plan if you suffer a defined life-changing event!

There is a hospital plan that will pay essential dental costs as well, further reducing the risk of self-funding out of hospital costs!

Plans may also offer specific maternity, chronic illness programmes, screening and preventative care benefits.

Some plans offer unlimited cover at network hospitals.


top upPrivate provider fees are not regulated and many can charge up to 500% of the medical scheme rates!

Some plans pay claims at 200% or 300% of medical aid rates, offering you a lower claim shortfall, but these are more expensive.

Increasingly, plans also have procedure co-payments, which you have to fund.

You are strongly advised to consider a GAP or TOP UP insurance plan to address these threats.

This separate insurance plan will cover most in-hospital claim shortfalls and scheme co-payments.

By adding a Top Up plan you can improve your medical aid benefits, so-much-so, that you can even consider joining a lower cost/benefit plan - with a lower premium - and still have an excellent, no risk medical aid for virtually the same premium as the higher medical aid!


Why not invest in a hospital plan and create your own day-to-day savings fund... open a bank savings account, or use your home as an access bond – pay extra into it and use that for day-to-day expenses?

Hospital Plans with Day-to-Day Savings

Expensive healthcare treatments can occur outside of hospital. If you feel you may need help with these types of expenses, but do not require a comprehensive plan, there are hospital plans that offer day-to-day benefits.

All in-hospital costs are covered as with hospital plans. There are two ways out of hospital claims are paid:

  • by way of defined, limited benefits, funded by the scheme itself or
  • by way of a savings fund.

An example of a scheme with hospital and defined day-to-day benefit plans.

Example of a hospital and saving fund plan.


WHAT ARE INCOME-RELATED PREMIUM PLANS?

income related premium plan
Low income earners should be able to access private medical providers, however a standard medical aid plan is way too expensive for their budget. Medical aids have certain plans with income-related premiums.

In fact Discovery Health's KeyCare Plan has more members than most total medical aids!

The plans offer hospital, day-to-day and chronic illness cover using a network of providers. They can include day clinics, maternity, HIV, cancer, diabetes and mental health programmes, preventative and screening and even home-based care benefits.

Momentum Health's Ingwe plan covers the use of any hospital, or a network of hospitals for a further premium discount, or state hospitals with the lowest of all premiums.

These plans offer life-threatening (heart attack, car accident etc.) and life-sustaining (cancer, kidney etc.) benefits for a very affordable premium, which you do need to prove!

WHAT BENEFITS DO STUDENT PLANS OFFER?

student medical aid
Student Plans

Full time students also have access to medical aid.
Benefits include unlimited hospitalisation at any hospital (including casualty), mostly unlimited basic day-to-day cover with network providers. Dental and optical benefits are included.

This medical aid is recognised by Home Affairs for study visas that International students require. And we can get you your certificate in a very short time!

bestmedicalaid.co.za can help you identify and join one of the top medical aids in South Africa!
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You must consult the schemes/company product brochures and rules for comprehensive benefit descriptions.

income protectionMedical aid pays healthcare costs.
What if a disability STOPS your income?


peter pyburn brokerpeter pyburn

Last update: May 6, 2021

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Medical Aid Authority Peter Pyburn.
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