There are few more complex industries than the healthcare industry and the financial services industry. Filled with jargon, legalese and difficult to understand communication, these industries intimidate many, with important information often flying over heads, in one ear and out the other, causing eyes to glaze over and even eyelids to droop.
But it is vitally important information and it is equally important that we understand it completely so that there is no misunderstanding in critical times; times when you or your family are in desperate need of healthcare or financial assistance.
This article aims to demystify this world, highlighting the key differences between health insurance and medical aid and thereby empowering you to decide which is best suited to you and your family’s needs.
Medical aid schemes are governed by the Council for Medical Schemes and health insurance is governed by either the Long Term Insurance Act (as in the case of Essential Med) or the Short-Term Insurance Act. What this means is that the laws governing the plans or policies and the laws protecting the members or policyholders are different. It is important to familiarise yourself with these laws.
Most medical aids pay out according to the National Health Recommended Price List (NHRPL) a nationally formulated and regulated price list for all in- and out-of- hospital medical services. Only a few pay out based on the South African Medical Association (SAMA) according to which many healthcare professionals charge. This results in the member having to pay the difference between the two rates.
A health insurance policy pays out at a set rate for every day that you are in hospital. What you use this reimbursement for is up to you; it can be used to assist with the cost of medical treatment or the daily expenses you cannot service while in hospital.
It is important to note that a health insurance policy does not offer the same amount of cover that a medical aid does. But in most cases it is a practical and sensible means to ensure that you and your family have access to quality private healthcare when you need it.
Many South Africans, who simply cannot afford medical aid, think they have to rely on the public healthcare system and cannot access quality private healthcare. This is not the case. Health insurance is ideal for those who cannot service substantial monthly medial aid contributions yet can contribute a lesser amount every month to ensure that he / she and his / her family can access private healthcare when it is needed most.
Health insurance is also a great complementary product to traditional medical aids. It can service the shortfall in payouts from medical aids i.e. the difference between NHRPL and SAMA rates or used to assist with the cost of living while providers are in hospital.
In addition to hospital cover, Essential Med offers a day-to-day benefit that gives policyholders access to consultations, medication and treatment for out-of-hospital needs. These services are available from over 3000 network-registered healthcare professionals throughout South Africa.