Medical aid or medical insurance? Which one will work for you?

Being concerned about our physical well-being is extremely important. And while you can exercise regularly, eat all the right foods, take all your vitamins and practice living healthily, there are always unforeseeable circumstances that require unavailable funds.

That’s where the safety net of medical insurance or medical aid comes in handy for our peace of mind. Everyone needs to know that in the event they end up in a hospital, they can focus on their recovery and not their financial situation.

We are always looking for ways to be smart with our money and investing in a medical scheme is definitely one way to do just that. You’ll be saving money in the long run, even if you go a few months paying the medical package installment without claiming. You know what they say, “it’s better to be safe than sorry”. And when you have a family to think about, not just yourself, it’s in their best interest to have a medical scheme plan as well.

If it is just you to think about or you lead a very healthy family, there are different medical scheme options that can be more affordable or suited to your medical needs. Two of which we will be looking at today are medical insurance and medical aid. The bottom line, however, is that you do need some sort of medical cover.

Medical insurance

Medical insurance is regulated by the long-term Insurance Act and usually kicks in when there is an emergency where hospitalisation and surgery procedures are needed. If you’re paying for it of course.

Medical insurance in South Africa works much like your car insurance would and is said to be a more affordable option to medical aid. However, the coverage of medical insurance is significantly less than medical aid, so you need to make sure you don’t need more from it as a medical scheme.

In the case of medical insurance, it can be used as gap cover alongside your medical aid plan. Or, on its own, it can cover accidental injury (disability), compensation for salary lost as a result of said injury and certain prescribed medications. It doesn’t cover pre-existing health conditions but rather anything that may happen after you take out insurance.

With medical insurance, you are given the option to include funeral and or death cover. You are also able to pay a set premium for the entire family or listed dependants. But medical insurance is usually provided as a lump sum for day-to-day hospital coverage and a preventative benefit, where medical aid provides more stable and continuous coverage as you need it.

Medical aid

Then we have medical aid which is regulated by the Medical Schemes Act. We have some of the best medical aids in South Africa that are affordable and offer comprehensive coverage. Unlike medical insurance, medical aid (depending on the plan you choose) can cover in and out of hospital medical activities.

This can include visits to the doctor, prescribed medication, consultations with specialists (from which most medical aid providers give you a list of specialists to choose from that they have medical aid rate agreements with) and certain procedures. It’s no doubt that medical aid provides more health coverage than medical insurance, which is why it’s more expensive but still, at some places, affordable. Not to mention hospital plans in South Africa which are primarily in-hospital medical aid coverage options at even more affordable rates.

With medical aid, your cover is determined by your medical aid plan and the premiums you pay. All medical aid plans are required to cover the Prescribed Minimum Benefits and coverage for 27 chronic conditions. However, it doesn’t always include personal accident disability like medical insurance does. Although, medical aid will start paying in-hospital fees from day one whereas medical insurance only kicks in from about day three.  

How to decide

There are pros and cons to both plans, but the most ideal option would be to have a medical aid plan with medical insurance as “gap cover” insurance (if they don’t already have a regular gap cover policy). You need to take a look at your family, health-related responsibilities and your monthly budget to see what you can afford and where you’re going to get your health coverage from.

Do yourself a favour and get quotes from different medical aid and medical insurance companies to compare prices and coverage (most important of which is coverage). You need to be comfortable with your decision and be at peace with how your health and finances will be taken care of.