Medical aid schemes and the growth and expansion of this now essential insurance-related product have advanced and changed a great deal over the years since the mid-1980s, when this type of private healthcare assistance was first introduced in South Africa, approximately 30 years after the product first launched in America.
Beginning with Hospital Cash Plans
Earlier schemes did exist in this country, but were similar to modern-day hospital cash plans, which have little to no direct bearing on funding medical expenses incurred while in or out of hospital. Nevertheless, these plans proved quite popular. Although such plans are still on offer in South Africa, it is crucially important to understand the difference between these cash payment plans and true medical aid.
The utilisation of cash generated by claims against hospital cash plans paid out during hospitalisation, but only commencing after a specified number of days following hospital admission, may be spent entirely at the discretion of the policyholder – not necessarily on paying for incurred medical expenses. Hospital costs, however, may be considerable, if not astronomical for an average income earner.
Actual Medical Aid
This is where private medical aid fits into and fills a sizeable gap in the current South African healthcare system, “medical” being the key word and concept. This product is similar to short-term insurance, such as that which covers a motor vehicle or household contents. In this instance, contract holders or members have full or partial cover for their healthcare needs, but nevertheless hope never to need to lodge a claim to pay for incurred losses or damages (to health and wellbeing).
Open and Closed Schemes
Initially, in South Africa, medical aid schemes were “closed” or restricted entities, which existed to provide employees of large companies or industry groups with relevant healthcare insurance and excluded private persons from membership. Later, private or open schemes were established to cater for the healthcare needs of those who were formerly excluded from participation in medical aid scheme membership.
Anyone accepted by a private scheme may obtain membership, providing that they disclose their healthcare history and pay their monthly contributions on the specified payment date. Failure to meet these conditions results in suspension, followed by cancellation. Over and above, almost no one is barred from membership, irrespective of his or her employment status.
A considerable number of South African schemes or companies offers medical aid plans and options, which are registered with the official Council for Medical Schemes. Because we are faced with uncountable instances where government-run healthcare facilities are unable to render all services efficiently, effectively, and in a timely manner, it has become essential to belong to a private healthcare scheme.
As indicated by the Council for Medical Schemes (CMS) in its 2018/19 annual report, there are 80 private healthcare schemes in South Africa. Of these, 59 were closed schemes, whilst 21 were open to anyone that is not a member of a restricted or other scheme. It is important to note that it is illegal to belong to more than one South African medical aid scheme simultaneously.
Medshield
By size – total number of members of both restricted and open schemes – the Council reports that our open medical aid scheme, Medshield, was ranked 9th amongst the largest 15 South African health insurance providers. Medshield offers 7 plans, from one which focuses primarily on providing unlimited in-hospital cover to our top plan that includes extensive and comprehensive cover for a wide range of in- and out-of-hospital procedures and services.
