Although medical aid schemes differ greatly from company to company and plan to plan, they can still be grouped into two main kinds: Traditional and New Generation medical schemes.
Traditional medical aid schemes offer benefits to their clients up to the limits of the plan. These limits are reset every year and no refund is given on benefits not used up. The cheaper medical aid plans, such as hospitalisation and network plans will fall under the traditional medical aid scheme banner. Fewer people are going for traditional plans, though, as new generation plans offer major benefits over traditional plans for a slightly higher monthly premium.
New Generation plans consist of two components: a risk pool and a medical savings account. The risk pool, similarly to a traditional medical aid, will cover “uncontrollable" expenses up to the limit of the plan. These will include major claims such as surgery and extended hospitalisation. A medical savings account works like a bank account in that a portion of your monthly premium is kept there to cover “controllable" expenses, such as GP visits, chronic and other medications as well as minor procedures. The savings account on these plans may never exceed 25%, or three months, of your annual premium contribution. The balance of your savings account will be carried over to the new year. Additionally, some medical aid plans allows more flexibility with the amount you save in your medical savings account. These can be anything from 5% to 25%. If you terminate your medical aid, the balance left can be transferred to your new medical aid’s savings account or, if your new plan doesn’t have a medical savings account, refunded to the member.
When choosing a medical aid, it is very important to assess exactly what medical coverage you need. Almost all plans come with a hospitalisation benefit, but the added “bells and whistles" will obviously cost extra on your monthly premium. That will bring you to the second thing you need to consider; budget. The cheapest medical aid in South Africa goes for approximately R600 a month. Adding dependents, like a partner or children, will be a bit extra but most plans offer dependent cover for a very small amount.
In summation, before signing anything you need to consider the following:
- How much cover do you really need? If you have a family, more rather than less may be advisable if you can afford it.
- How much can you afford to spend a month? This is obviously very important as you can’t afford to let a medical aid plan lapse. Murphy dictates that you will need it exactly after it lapses, so that should not occur, ever.
- Are you a higher risk client? Do you smoke, drink or take part in extreme sports? These factors will influence the amount you pay monthly so shopping around as much as you can will help ensure you get the best deal.
- Get help from a professional! Do you own research so you are knowledgeable on what you want and what you can get, then ask a professional to assist you even further to ensure you have sufficient cover at an affordable premium.
Stuart Broad is a marketer who works for a number of South African Medical Aid Schemes sites. If you are looking for a budget for medical schemes, he recommends trying to get Medical Aids In South Africa at Cheapmedicalaid.