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What You Should Know About Medical Schemes


Medical schemes are non-profit companies, which are formed to assist their approved, paying members to meet or cover their medical expenses partially or fully, as and when they arise. Scheme members pay for their membership monthly by contributing the required membership fee, which is known as a contribution in the medical aid industry.

Purpose of Members’ Contributions

The accumulated contributions are used to cover and pay service providers’ and/or members’ medical claims (within the parameters of the selected medical aid plan), salaries for the medical scheme’s employees, which generally include medically qualified advisors, administrative costs, office rentals, and security services, as well as build up reserve funds.

Reserve Funds

By law, medical schemes are required to hold a minimum of 25% of members’ accumulated contributions in reserve to ensure the sustainability, stability, and solvency of the scheme, while the scheme itself (the company) is required to be registered and accredited with the Council for Medical Schemes in South Africa.

Medical Schemes’ Regulatory Body

This council is described on as “an autonomous statutory body created by parliament to regulate medical schemes in South Africa”. However, with the proposed introduction of a new NHI (National Health Insurance) fund in this country, which many experts fear may be doomed before it even commences, some changes may be inevitable.

Providing Medical Cover Here and Now

Nevertheless, one must make provision for private medical aid membership here and now, because the well-intended free medical care for all at state medical facilities is barely functioning, because it is so immensely oversubscribed and consequently, inefficient and inadequate, despite best efforts to provide quality services to patients.

Private Medical Schemes

Private (non-state) medical schemes are closed, restricted, or open. Membership of closed schemes is restricted to employees of companies or organisations that have access to their own or their industry’s own medical aid schemes, and their dependants, as well as former employees who have retired from the concern. Members of the public cannot join a closed scheme.

Frequently, members of restricted schemes pay comparatively smaller contributions than those who belong to open medical schemes, especially if membership of a group scheme is a compulsory condition of employment. In the former case, the company usually subsidises employees’ medical aid contributions, to keep the cost-to-employee low.

Anyone may apply to an open medical scheme for membership of a plan of his/her choice, providing the applicant meets certain criteria, and is able to afford ongoing membership. Members of open schemes may downgrade from their existing plan to a lesser, cheaper option at any time, but upgrades are only permitted once per year, generally at the start of a calendar year.

This widely applied rule prevents potential fraud, like members upgrading to a more comprehensive and expensive plan just prior to an anticipated, costly procedure, and then downgrading again, immediately after the event, and lodging a large claim for services, treatments, or procedures rendered.

Open and Affordable Scheme

KeyHealth is an open medical scheme, which has become known for its six really affordable medical aid plans. We are able to keep our costs and your contributions as low and affordable as possible, because we provide smart, simple, straightforward medical aid plans, no more and no less. This is, or should be, the very reason why you choose KeyHealth.