It is almost impossible to consider private healthcare in South Africa without first considering medical aid cover. The fact is that the public health system is under significant financial strain. Government cannot usually provide the same quality of care as the private healthcare system as medical schemes can fund. Medical aid is often considered an essential cover in this day and age as the already burdened public health system is further strained with a growing South African population.

What is Medical Aid?

Medical aid is a type of financial cover administered by medical schemes which pays for the cost of essential healthcare services. It works similar to other types of insurance – members must pay a monthly contribution (premium) and the medical scheme pays for medical expenses (claims). Non-essential and elective procedures like cosmetic surgery are usually not covered by medical aid.

Without medical aid, most South Africans who do access private healthcare services would be unable to afford to do so. There was over 100 medical schemes operating in South Africa prior to 2010 but this dwindled down to approximately 80 schemes by 2018. Several medical schemes are under financial strain and it is estimated that this number will further decrease by 2020.

Open and Restricted Medical Schemes

Medical schemes may either be open or restricted, sometimes also referred to as closed. An open medical scheme will cover any South African who can afford one of the medical aid options/plans. A closed or restricted scheme on the other hand will only allow membership based on certain criteria.

These restricted medical schemes are usually industry-specific. For example, there may be a specific medical scheme for workers in the metal industry or for government employees. This does not mean that a person has to join a medical scheme within their industry but a person who is outside of this industry cannot join the respective scheme.

Types of Medical Aid Options

Every medical scheme offers a range of medical aid plans. This varies by cost and benefits. Plans with more benefits naturally costs more with top-end plans only being affordable to a small portion of medical aid members. Broadly, there are two medical aid options to consider – comprehensive plans and hospital plans.

A comprehensive medical aid covers both out-of-hospital and in-hospital healthcare expenses. A hospital plan only covers the cost of in-hospital care. Both options provide chronic benefits for the diagnosis, treatment and management of chronic diseases.

How Does Medical Aid Work?

Private healthcare costs can be exorbitant and unaffordable for most employed South Africans. Most people cannot pay for these expenses out of pocket, particularly on an ongoing basis. From doctor’s visits and medication to blood tests and scans, these costs can run into the thousands and even tens of thousands of Rands for out-of-hospital care. The costs climb significantly with in-hospital care, be it a hospital stay or surgery.

Medical aid pays for essential healthcare costs. The process by which medical aids work is simple.

1. A South African must first join a medical scheme and becomes a medical aid member on a plan/option that they can afford.
2. A member must ensure that monthly contributions (premiums) are paid on time at the beginning of each month.
3. After waiting periods lapse, a medical aid member can then expect the scheme to cover healthcare costs according to the respective option or plan.
4. The service provider (doctor or hospital) can submit a claim to the medical scheme and will then be paid for relevant services rendered. This only applies for providers who are contracted into medical aid.
5. Alternatively, the medical aid member pays the service provider cash for the relevant services and then claims back from the scheme. Only legitimate medical expenses will be refunded.

Is medical aid available to all South Africans?

Any person who is a South African citizen or legal resident can sign up for medical aid. No medical scheme can refuse membership based on a person’s age or health status. Furthermore medical schemes cannot charge members different rates for the same plan unless they are over 35 years of age and liable for a late joiner penalty or are earning over a certain threshold and wish to join a low income medical aid option.

However, this does not mean that medical aid cover is accessible to all South Africans. Since cover is so expensive, most South Africans cannot afford it and have to instead rely on the public health system for their medical needs. A sector that is often left without cover are senior citizens. Medical aid for pensioners is often impossible to afford due to the late joiner penalty for members who start cover after 35 years of age as well as due to the culture of poor saving for retirement.

Does medical aid cover non-essential medical expenses?

Medical schemes do not cover non-essential and elective procedures like cosmetic surgery. However, unlike private health insurance in many other countries, medical aids do not cover certain expenses that may be deemed non-essential. Childbirth for example is covered by all medical aids and pregnancy costs may also be covered depending on the option.

Some schemes will also pay for fertility treatments and bariatric (weight loss) surgery up to a certain limit. Beyond these few exceptions, any medical condition may be covered to a certain limit depending on the medical aid plan and option. Prescribed minimum benefits (PMBs) are conditions for which the medical aid cannot restrict payouts and includes major chronic diseases as well as certain emergency medical conditions.

References:

1. What is a medical scheme? KeyHealth