The rising cost of medical care has had a significant impact on the economy. Even a very minor procedure may need you to dip into your retirement funds today. With the high price of doctor visits, hospital stays, and other medical costs, it is crucial to have medical cover.
You may want to think about getting health insurance or medical aid, but aren’t sure what their major difference are. There are important distinctions between these terminologies despite the frequent confusion between the two.
To help you and your loved ones make the best decision possible, we've compiled all the information you'll need here.
The main differences between medical aid and medical insurance
A medical aid program's primary goal is to protect its participants from the financial burden of medical care. Looking at various medical aid comparisons, medical aid plans require its members to see in-network doctors and limit the types of covered services. As such, amount you receive for medical care is determined by the tariffs of the plan you have chosen.However, the goal of health insurance is to guarantee a predetermined sum of money in the event of a medical emergency. No matter what services you need or which doctors you see, this cost will remain the same.
Some forms of health insurance are rather recent innovations. The introduction of these plans is largely attributable to the fact that regular medical aid plan premiums have risen to levels that are unaffordable to the vast majority of South Africans.
Insurance companies saw a need in the market and filled it with plans that offer cheaper rates but less comprehensive health care coverage.
Differences in price and benefits
The Prescribed Minimum Benefits (PMBs) are a set of minimum coverage requirements mandated by law for a variety of chronic diseases and ailments. When providing coverage, health insurance companies are exempt from such regulations and are therefore not required to take them into account.In most cases, the hospital will receive payment for your care directly from your medical aid provider if you are admitted. When you have health insurance, you will be given a lump payment to pay for your hospital stay.
This amount may or may not be enough to cover all of your expenses. Problems arise, for example, when people sign up for health insurance but then are surprised by the high expense of necessary medical care.
A medical aid plan may offer more complete protection, but it typically excludes disability due to an accident or the loss of a limb. Insurance for final expenses is an option, on the other hand, something most medical aid plans don't pay for.
Regulatory differences
The Medical Schemes Act and the Council for Medical Schemes control all medical aid plans in the country of South Africa. However, the Financial Services Board is in charge of health insurance under the Long-Term Insurance Act.Final Thoughts
With medical aid, you won't have to worry about costs associated with a hospital stay, managing a chronic illness within the limits of the minimum benefits, or meeting the day-to-day requirements of your plan.If you become sick or injured and are unable to work because of it, medical insurance will provide you with a financial safety net. Aside from medical costs, it also takes care of any additional costs that may arise while you're in the hospital. You buy it with the expectation that you will never need it, but knowing that you have it is reassuring.