Medical schemes in South Africa are tasked with providing the public with financial assistance to meet the high cost of private healthcare. Only some of these are only open to those in defined groups such as the staff of large companies, members of professional bodies and workers in specified occupations, like building and construction, and these are called ‘closed’ medical schemes. The others are called open medical schemes and anyone is free to join or obtain quotes from these medical aids. If you are preparing to join one of these schemes for the first time, it will be helpful to understand how they work.
How the Schemes Work
Just like the insurance companies, these schemes operate on the principle known as shared risk. They rely on the statistical probability that most members will make no claims or only minor ones. Providing they have enough members, their premium income should be sufficient to cover the claims of the minority and leave some cash in reserve. Despite rising healthcare costs, medical aids must strive to keep quotes competitive to maintain sufficient membership.
Unlike insurance companies, these schemes must operate on a not-for-profit basis. As such, they are required to exercise good governance, hold an exceptional international credit rating and maintain a solvency ratio of at least 25 %. The solvency ratio is the percentage of the total premium income remaining after all claims and operating expenses have been met. Premium prices are a crucial factor in determining a scheme’s success. They must be high enough to cover costs yet sufficiently affordable for medical aids to offer realistic quotes. Different fund managers tend to approach this challenge in different ways.
How to Obtain Medical Aid Quotes
Thanks to the internet, it is no longer necessary to grab the yellow pages and “let your fingers do the walking”. One of the many tasks that have become simpler online is comparative shopping. Several enterprising companies have set up comparison sites that enable visitors to obtain multiple quotations for various services by entering a few personal details. In addition to vehicle, home and life insurance, it’s also possible to receive quotes from several medical aids by providing a few details about your needs.
You might be tempted to go straight to the bottom line, compare the monthly premium prices and settle for the cheapest. However, your decision can have a direct impact on your health and that of your loved ones, so you will need to look beyond the price tag. Schemes offer their members benefits in the form of varying degrees of financial support for pre-defined contingencies. Ensuring you and your family will receive all those benefits you might need is far more crucial than the price tags in your medical aid quotes.
Making your Choice
Some schemes seek to justify their prices by offering irrelevant benefits such as loyalty points or free movie tickets. In contrast, others choose to limit their core benefits in exchange for more modest premiums. In practice, longevity is among the most reliable ways to measure a scheme’s reliability. Medshield is the nation’s oldest scheme with a Global Credit rating of AA- and a solvency ratio of almost 60%. Forget comparative medical aid quotes. First, check out the Medshield product range with its unique core benefits and affordable premiums.
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