Medical insurance in South Africa is a different product from medical aid. The latter is often the preferred form of cover for private healthcare costs. However, medical aid is expensive and not all South Africans can afford it. In fact, less than 20% of the South African population is on medical aid. Without a National Health Insurance (NHI), private medical insurance is the more affordable option after medical aid. It is important to understand how medical insurance works. It is not medical aid. It does not have the same benefits as medical aid. It is also not regulated in the same way as medical aid. However, it still offers some degree of private health access for South Africans.
What is medical insurance?
Medical insurance, also referred to as health insurance in South Africa, is a short term insurance that covers some of the costs of private healthcare. It usually pays the member directly and has limited benefits per medical event. This is where the major difference lies with medical aid which pays set tariffs for the diagnosis, treatment and management of specific medical conditions. Medical insurance is not standardised in South Africa. With several medical insurers now offering a host of plans, the benefits can vary greatly among medical insurance plans.
Some medical insurance plans only pay day-to-day benefits. This is for outpatient treatment at a GP, specialist or certain medical service providers. The benefit may not be in line with the doctor’s fees. Either the doctor willingly accepts the lower rate offered by the medical insurer or the patient is required to pay a co-payment above and beyond the medical insurance payout. Other plans also includes hospital benefits per event. This is a specific maximum amount that will be paid for that specific event and any costs above and beyond this amount will not be covered by the medical insurer. The payout is not in line with hospital or doctor’s tariffs.
Is medical insurance the same as medical aid?
Medical insurance is not the same as medical aid. Both types of cover focus on private healthcare funding but work in different ways and are also regulated differently. Medical insurance is a short term insurance product that falls within the ambit of the Short-Term Insurance Act whereas medical aid is provided by medical schemes who are regulated by the Council of Medical Schemes according the the Medical Schemes Act of 1998. Medical insurance disputes should be directed to the Ombudsman of Short Term Insurance (OSTI) whereas medical aid disputes are managed by the Council of Medical Schemes.
How Medical Insurance Works
Typically medical insurance reimburses the member after treatment. This means that the member must pay the doctor directly and then claim from the medical insurer. Some insurers will load benefits onto a debit card prior to treatment which the member can then swipe at a doctor’s office. The insurer may also provide a financial guarantee to a private hospital to admit a patient with the understanding that they will not pay for costs above and beyond a certain limit for that event. However, not all private hospitals in South Africa will accept medical insurance as a form of immediate or future payment unlike medical aid which is accepted by all private hospitals.
Nevertheless medical insurance fulfils an important gap in private healthcare funding within South Africa. Medical insurance plans can cost as little at one-third of medical aid cover. There are also many network doctors who will accept medical insurance payments, albeit at a lower rate. It is important that members on medical insurance ensure that they have cash in hand to pay their medical bills and only claim thereafter from their insurer. However, they may not be reimbursed 100% of the medical bill. Therefore medical insurance should be seen as partial cover for private healthcare costs.