For many people, medical insurance and medical aid sounds very similar. But there are actually a few important differences. Let’s take a look at some of the differences between medical insurance and medical aid.
Medical insurance is governed by The Financial Services Act and insures individuals against the risk of incurring medical expenses. Here are a few interesting facts about medical insurance:
- It may be used as a gap cover in conjunction with your medical aid for cover where your medical aid scheme may fall short;
- It protects your financial assets and promotes wellness and health;
- It covers certain accidental injuries such as disability;
- As a result of accidental injury, it can cover your salary when you’re unable to work;
- It gives you the option of including death and/or funeral cover to your plan;
- It covers health events at fixed or stated amounts paid directly to the member as opposed to a medical service provider; and
- It offers stated benefits and a formulary that may or may not cover Prescribed Minimum Benefits.
On the other hand, medical insurance is governed by The Council for Medical Schemes, and it is a plan that allows you medical care without financial burden should something unexpected happen and you need hospitalisation.
Now let’s take a look at medical aid:
- Cover is based on tariff codes and procedures;
- Often has a shortfall due to the difference between the National Recommended Price List and the South African Medical Association rates which is what healthcare professionals charge;
- Must, by law, cover Prescribed Minimum Benefits;
- Has specified and yearly limits for procedures and health events do not need to be specifically stated;
- Does not include any personal accident disability and loss of limbs cover;
- Is not authorised to include death and/or funeral cover as part of the Medical Aid Scheme; and
- Pays in-hospital benefits according to the National Recommended Price List limiting benefits as per the plan.