In a constantly changing market it is essential to have comprehensive medical cover because private healthcare in South Africa is very costly.
Most people make the mistake of assuming that medical aid is medical insurance.
Yes, it is a form of insurance, but it differs in the following important ways:
- Firstly, medical aid societies are non profit organizations. Unlike typical commercial businesses, they are not structured to make a profit from the business they conduct. However, to protect members interests, medical aid schemes are required to retain 25% of their gross income as a hedge against future claims.
- Secondly, the industry is governed by a Government-appointed Regulator to ensure that trading practices are in the best interests of the members.
- Thirdly, schemes are governed by Trustees and not by Board members or shareholders. These Trustees are appointed by the members, who are the de facto owners of the scheme.
A group of people regularly put their money into a central pool or kitty and they can access this to cover medical expenses in times of need. Another way to see the kitty is to consider it as pooled resources to cover the costs of your healthcare needs.
The members appoint the Trustees to oversee the administration and management of the scheme in compliance with all legal and financial requirements. In addition, the Trustees ensure that the benefits offered and the contributions payable are in the best interests of members.
Incompass have contracts with the following medical aids (Medical Aid South Africa):
Discovery, Fedhealth, Liberty, Momentum and Telemed
The diagram below shows how medical aid services are differentiated in South Africa
- Hospitalization This is the expensive part of the medical aid, commonly known as RISK. Different medical aids pay different tariffs, ranging from 100%-300%
- Chronic Medication The top 25 commonly known chronic diseases must be paid by all medical aid societies. The more comprehensive your plan, the better the chronic benefits will be.
- Day to Day This benefit is for all out of hospital benefits, such as Doctors, Dentists, Specialists, Optometrists and prescription medication. In this area we have a Traditional Option (set benefits and what you do not use in the year will fall away), and a new Generation Option (medical savings account from which out of hospital expenses are paid. It is an up front Rand value amount and can be carried over to the following year.) Each of these options is divided into different plans, ranging from Hospital plans to Comprehensive plans.
All medical aid societies have an open door policy, so no medical aid can decline your application.
Therefore, the medical aid societies need to assess the risks they are taking on. To do so, they apply the following risk equalizers during the assessment process.
On admission to membership a scheme may impose:
- A 3 month general waiting period
- A 12 month condition-specific waiting period, or
- A waiting period on certain PMB (Prescribed minimum benefits)
- A Late joiners penalty LJP
The late joiner penalties are as follows:
1-4 years1) : 5% – loading on premium
5-14 years : 25% – loading on premium
15-24 years : 50% – loading on premium
25+ years : 75% – loading on premium
1)of break or not being insured
1. A child born to a member
2. Change between benefit options
3. Termination of membership due to employment or employer changing schemes
|NEW PROVISION APPLICABLE TO WAITING PERIOD|
|CATEGORY||3-MONTH GENERAL W/P||12-MONTH CONDITION W/P||APPLICATION TO PMB|
|New applicants, or person not member for preceding 90 days||Yes||Yes||Yes|
|Applicants who were members for less than 2 years||No||Yes||No|
|Applicants who were members for more than 2 years||Yes||No||No|
|Change of benefits||No||No||N/A|
|Child-dependant born during period of membership||No||No||N/A|
|Involuntary transfer due to change of employment or employer changing scheme||No||No||N/A|
Contact us for more information about Medical Aid South Africa
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