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Medical Aid – Understanding Medical Aid without Savings


Understanding how Medical Aid works with and without Savings

There are many things about private healthcare cover that scheme members frequently fail to understand. However, it has to be said that the explanation for this is often that, when drafting their terms and conditions, many schemes tend to use language that is simply too technical for the layperson. In many cases, any attempt to understand these Ts & Cs is likely to cause confusion for almost anyone but a physician or surgeon who also happens to be well versed in contract law. One of the common sources of confusion among medical aid members is the difference between those products without a savings account and those that include this facility.

The main purpose of this division of funds is to set aside a portion of a member’s premium that will be used exclusively to meet certain day-to-day contingencies. When the occasion may arise, for instance, when obtaining a once-off prescription from a GP that is not intended to treat a prescribed chronic condition, the costs will be reimbursed from that portion of the total annual premium reserved for this purpose. This portion will typically represent about 20% or so of that total but, to comply with the law, it may not exceed the designated maximum of 25%. This limit is set, primarily, in order to reduce the chance that, if it were set any higher, some of the schemes that may operate with minimal solvency ratios might find themselves with insufficient funds to support claims on the main account.

For those who believe that they are able to meet such day-to-day costs from their own pocket, a medical aid product without a savings facility should prove to be perfectly adequate and will, of course, also be offered for a proportionately lower monthly premium. Those who may suffer from a chronic illness such as diabetes or cardiac failure need have no concerns about the cost of lifelong medication because illnesses such as these qualify as prescribed minimum benefits (PMBs) and the law states that these must be covered by the fund and so all claims in this category must naturally be met from the main account.

One of the most common forms of medical aid that is offered without the savings option is, of course, the hospital plan. While it is certainly the cheapest option for someone on a limited budget, it designed to meet the needs of young people in good health whose main concern is coping with the massive cost of attending to serious injuries sustained in an accident or some unexpected emergency surgical procedure. For married couples with children it is should never be considered as a means to economise. Furthermore, for those who may be suffering from a chronic illness, the mandatory support for PMBs is applicable only during those periods when the member is retained as an in-patient. At all other times, payments for tests, treatment and outpatient care will be the responsibility of the member, which could make this option a significantly false economy.

Alternatively, if you want economy without compromising your cover, KeyHealth offers medical aid products without the savings facility that are far more comprehensive than the norm and which despite offering several unique and valuable benefits, remain very affordable.