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An Understanding of Medical Aids Leads to Better Healthcare Choices


Insuring your car or the contents of your home is a relatively straightforward process. For vehicles, it is a matter of providing the purchase price, engine details, age, mileage, usage, and the location where it is kept. On the other hand, obtaining cover for home contents involves preparing an inventory showing the cost of each item. When attempting to obtain cover for the cost of private healthcare, however, whatever information may be requested, it can never be sufficient to predict the possible risk accepted by the cover provider. One of the keys to understanding medical aids is the realisation that their premiums are based upon the benefits they extend to members and not on the sums assured as is the case with the mainstream insurance industry.

Instead, each fund offers a number of different products, each with clearly-defined benefits, in return for a fixed monthly sum. Individual products are offered at differing but fixed prices according to the value of the benefits they include. The terms and conditions spell out exactly what each product will cover, and defines any limits or exclusions that may apply to individual categories of treatment, such as orthodontics or ophthalmology. Armed with these details, a prospective member is able to make an informed decision based on an understanding of what medical aids are offering and the cost per month.

The cover provided by most products can be extended either to an individual, to a couple, or to a family group. In each case, the contribution required from the principal member will be the highest, while cover for each of the dependent members costs proportionately less. Given that the fees charged by service providers are subject to inflationary forces, such as price hikes for equipment and consumables, and even new technologies, premium costs are also subject to periodic adjustments. Consequently, membership of a scheme is limited to a calendar year, and new premiums may be applicable upon renewal.

While insurance companies may refuse cover to those they consider as high risk, medical aids must display more understanding. Refusing cover to members with a pre-existing condition, for example, would be inhumane. Nevertheless, these specialised insurers, who are required by law to operate as non-profit companies, must ensure retaining sufficient premium income to meet their members’ claims. Consequently, all new members are subject to a waiting period, commonly three months, before cover commences, while those with pre-existing conditions may be precluded from cover related to that condition for up to a year, but will be covered for all other contingencies.

Insurance companies offer a hospital cash plan, but understanding how this differs from what medical aids offer under their hospital plans could be crucial. Insurers’ cash plans simply pay a fixed sum for each day in hospital, and fall far short of meeting the actual costs involved. By contrast, the comprehensive hospital plans designed to help young, single, and generally fit members cope with an unexpected illness or injury cover all expenses during periods of hospitalisation.

Finally, understanding that medical aids require sufficient membership to remain viable explains why some offer incentives for joining. Given that these incentives must be paid for somehow, there is a risk that benefits could be curtailed. KeyHealth offers valuable core benefits, not irrelevant freebies.