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Understanding How Medical Schemes Work


It is important to understand clearly and unequivocally how a medical scheme works before you proceed to join the scheme of your choice. This is the first step in obtaining medical aid cover. However, do you understand what a medical scheme is?

Medical Schemes in a Nutshell

A medical scheme is a non-profit organisation that exists to assist its contributing members to pay for their healthcare needs and medical emergencies. The funds, from which members’ medical claims are paid, consist of accumulated monthly contributions by members. Each medical scheme has a range of plans or options from which members must select the one that best suits their actual, identified needs, while providing some medical cover for unforeseen eventualities when life happens.

Most modern medical schemes offer a variety of plans, each one with its own terms and conditions and often, medical jargon, technical details, and fine print that members may overlook or not understand, because there is so much of it in each plan. Moreover, there may be umpteen plans to study and compare, all within the same medical scheme.

Essential to Have, but Hopefully Never Needed

From the members’ perspectives, medical scheme membership is somewhat similar to short-term insurance on one’s vehicle or household contents; it is comforting and reassuring to know that you have cover if something unfortunate and costly happens, but you sincerely hope that you will never need to submit a claim.

Origins of Medical Schemes

Medical aid schemes originated in the United States of America during the 1950s, but it would be some 30 years before such organisations were established in South Africa. Many of the earliest medical insurance-type options were merely hospital plans that paid out a cash amount – commensurate with monthly paid premiums – for each day of hospitalisation. Hospital cash payments usually only commenced after a few days in hospital, following initial admission, and funds could be used for medical purposes or anything else, without restriction. These plans are still available today in South Africa and elsewhere, and operate much as they did in the past.

By the 1980s, medical aid schemes in South Africa, other than hospital cash plans, mainly consisted of group schemes that were closed to independent members of the public or those people who were self-employed and those who worked for companies that did not offer medical scheme membership as a fringe benefit. Organisations such as banks, the police force, the national airline, the post office, and other large groups each had their own group medical scheme. Members’ contributions were either fully or partially subsidised by the employer, and there were very few limitations placed on medical cover, unlike today, when private medical schemes are full of difficult-to-understand terms and conditions.

Moreover, there are a multitude plans to study and compare per medical scheme, and then you have not even compared different schemes’ plans to each other. You may find yourself negotiating a veritable minefield of medical aid schemes, unless you have a look at KeyHealth medical scheme and its five straightforward plans – five only – and they are all smart and simple, while their workings are clear and easily understood. What a relief!