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Choosing a Medical Aid in South Africa


 

  

  

What is a Medical Scheme?

What is a medical scheme and how does it differ from a medical aid? What is a Medical Schemeis a question that a lot of people have asked. Let us take a look at both.

What a medical scheme is:

  • Medical aid schemes are non-profit organizations that help their members to have access to private medical care in exchange for monthly premiums.
  • Schemes are run by a board of trustees of which 50% have to be members of the scheme.
  • A non-profit organization means the company do not have shares and do not pay dividends due to income received.
  • Schemes may be administered by an intermediary, like an insurance company. The administrating company may make a profit, but this profit is usually minimal due to high medical claims pay-outs and admin costs.

What is a medical aid?

Medical aids are medical insurance products provided by medical schemes; that helps the client pay for high private medical costs. This includes hospital and day to day cover. Medical aid plans differ from one scheme to another and so does the benefits they offer. The premium paid to the medical aid will go to the scheme and from there be distributed to pay for the claims.

How does a medical scheme work?

  • A medical scheme uses the money they receive trough premiums to cover medical claims and additional non-medical costs to run the scheme effectively.
  • The income the scheme receives should be enough to cover all the medical costs of all the members.
  • Schemes are run like trusts, where all the money of the members are pooled together and then used to pay for the medical expenses of all the members in return.

Criteria any medical scheme has to comply with:

  • The medical scheme must have a solvency percentage of at least 25%
  • Schemes may not discriminate against any group or person.
  • At least half of the trustees of a scheme have to be members of the scheme.
  • Some facts regarding medical schemes you may not have known.
  • A medical scheme may not show you away because you have a certain illness or disease.
  • A list of 270 conditions exist called Prescribed Minimum Benefits. This list was created by the government to ensure that all members of medical companies receive basic medical care. The schemes are bound by law to cover for these conditions in full without charging any co-payments.
  • 25 of these prescribed minimum benefit conditions have been listed on the chronic diseases list. Meaning a scheme cannot cover less than these 25 chronic conditions.
  • The standard of care given to these conditions must at least be at par to those received in a public healthcare facility.
  • You are not allowed to be a member of more than one medical aid scheme.

Review: What is a medical scheme? A medical scheme is a non-profit organization that manages medical aid account on behalf of the members of that scheme.  Their main purpose is to provide affordable medical aid and ensure their members receive the best medical care possible. © Medical Aid Plan

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