With medical costs becoming increasingly unaffordable for the average South African, medical aid schemes and medical insurance can often help to reduce the financial strain and keep you fully covered.
Medical aid and medical insurance have very different purposes. Let’s look at the difference between these two types of health care coverage.
The distinction between these two types of healthcare coverage lies in how they function and what each option covers. While both cover day-to-day medical expenses, understanding the difference can help you make an informed decision about which kind of health plan is right for your family’s needs.
A medical aid scheme gives you access to healthcare services for a fixed amount each month. Based on your monthly premium, you get access to a range of health care services such as doctor visits, prescription drugs, and hospital or medical treatment. However, the degree to which you are covered will depend on your medical aid plan.
Most companies offer medical aid benefits to their permanent employees. You can also opt to join a medical aid independently of your employer.
Unlike medical aid, medical insurance pays you a set amount for every day you spend in the hospital. If you are unfortunate enough to fall ill, medical insurance covers the cost of hospital stays and visits to the doctor. This means that more of the financial strain of medical expenses is lifted from you, your family, or your business.
However, health insurance products are designed to cover you during illness or injury, and medical insurance does not replace a more comprehensive health care plan that includes medical aid, disability insurance, or critical illness insurance.
You can select both a medical aid scheme and medical insurance, but this will increase the costs of your monthly premiums. Therefore, you need to make an informed decision on which type of medical coverage or combination is best for you. Here are some questions to consider when making this important decision:
When weighing up your options regarding which type of cover is right for you and your family, always seek professional advice.
The monthly premium cost is the main consideration for choosing between a health care policy. However, this is not the only factor to consider when deciding which option would best cover you against unforeseen illness or injury.
Whether you're on a budget or not, you need to decide which is more beneficial for your circumstances: having lower monthly premiums or having better benefits. If you're researching medical aid, here are some benefits to consider when deciding between the different available options.
These benefits include doctor visits and treatments given by doctors, specialists, psychologists, physiotherapists, dentists, nurses, and pharmacists. You can also include your dependents on your medical aid plan.
You can pick between a plan that covers only your in-hospital medical treatments or one that also pays for any aftercare, such as rehabilitation. Since you never know when illness or injury will strike, making this essential decision can save you substantial amounts of money in an emergency. In addition, you should always inquire about whether your plan pays for the cost of chronic medication such as diabetes medicine, high cholesterol medication, or hypertension medication.
Since health insurance takes the risk of illness out of your hands, companies are able to offer it at lower premiums. However, these benefits come with costs. Most policies have waiting periods, especially on pre-existing conditions.
For instance, if you have diabetes, you might have to wait a few months to a year before claiming for any treatments or doctors visits related to the condition. Depending on your medical history, opt for a plan with a shorter waiting period.
More comprehensive cover typically has a higher limit than more affordable options. You also have the freedom to choose medical treatment from physicians and brands outside the health insurance network.
Understanding the terms used when discussing medical insurance plans can be very confusing for some people. Just alike, carefully read the fine print of any medical aid plan before signing up to ensure that you understand what is covered and, just as importantly, what is excluded.
Always get a quote for the monthly premium before signing up to any medical aid plan, since the amount you will pay in premiums over the period of your contract may differ depending on your health.
Signing up for a medical scheme has more than just health implications. South Africans can receive tax relief when they take up a medical scheme. In other words, when you sign up for medical aid, the money that you pay will be tax-deductible if you qualify.
This means that your annual tax liability for the year will be reduced by the amount of medical aid contributions you make during that same year. Medical aid contributions that are tax-deductible include monthly premiums, co-payments, and cash donations given to certain medical aids.
There are many benefits to having medical aid instead of traditional insurance plans, such as co-pays and deductibles which can quickly add up. The decision on which plan to choose ultimately depends on your requirements. Either of these plans can be sufficient enough for you, or a mixture of both might prove to be the best alternative for your situation. This is why it is important to understand your needs in the present and the future.
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