What is a Medical Scheme?
What is a medical scheme and how does it differ
from a medical aid? is a question that a lot of people have asked. Let us take a look at
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
- 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
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
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
- 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
Criteria any medical scheme has to comply
- 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
- The standard of care given to these
conditions must at least be at par to those received in a public healthcare
- 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
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