Medical scheme, Health Insurance? What’s The Diffs?
Medical scheme cover and health insurance: what’s the difference?
Not everyone is aware of the considerable differences between medical scheme cover and health insurance products. Making this fairly common mistake can however prove costly as you may well run the risk of not having the appropriate health cover when you need it most. CompCare Medical Scheme Chief Executive Officer and Principal Officer, Josua Joubert explains some of the critical differences between the two.
The Demarcation Regulations, which came into effect on 1 April 2017, sought to clarify the boundaries between medical scheme cover and other forms of supplementary medical insurance and went some way towards achieving this. Nevertheless, some healthcare consumers can still quite understandably get confused between medical scheme benefits and insurance products.
It is important to note that medical schemes and insurance products are governed by different legislation: the Medical Schemes Act 131 of 1998 governing the medical aid sector, while insurance products are governed by the Short-Term Insurance Acts.
Prescribed Minimum Benefits
The confusion between medical scheme benefits and insurance products, such as hospital cash plans, means that health insurance products that fall outside of the Medical Scheme Act are often purchased. These products do not offer access to health cover provided by the Prescribed Minimum Benefits (PMBs) for 270 life-threatening conditions and 26 chronic conditions that medical aids are required to cover by law.
PMBs require all medical schemes to cover the full costs of treating these illnesses, which include emergencies and the chronic conditions such as diabetes, coronary artery disease, hypertension, asthma, epilepsy and others.
PMBs therefore assist in providing medical scheme members, and even those on hospital plans, with a critical level of protection and cover should they ever experience a healthcare calamity. It should be noted, however, that some medical scheme options might require that their members access treatment of chronic diseases from their medical provider networks of doctors and hospital.
Hospital cash plans, which should not be confused with the hospital plans provided through medical schemes, tend to pay out fixed lump sums irrespective of the service levied by hospitals, specialists and other providers of healthcare services. They typically provide for loss of income and contingency expenses associated with a health event, but are not directly related to medical expenses.
Medical schemes on the other hand, reimburse all the providers, including hospitals and specialists, directly. This has the advantage of taking care of all of the administration while the patient concentrates on their recovery.
Comprehensive cover that is cost-effective
It should be kept in mind that medical schemes such as CompCare are not-for-profit associations that operate like mutual organisations for the benefit of members and that they are governed by a board of trustees, which is elected by members. As such they look to serve their members while providing them with the best possible healthcare cover in a manner that is most cost-effective. Short- and long-term insurers providing health insurance products are, on the other hand, commercially driven for-profit companies and are generally owned by shareholders.
Medical schemes are required by the Medical Schemes Act to maintain minimum solvency ratios, which provides members with the assurance that the medical scheme will remain sustainable and will be there for the member when he or she needs the care.
Premiums and fees
Insurance products do not offer the protections afforded to medical scheme members through the Medical Schemes Act, and while they can be most useful in assisting the individual financially during a time of critical illness, the consumer should be wary of claims that they offer comprehensive cover for all expenses that may be incurred as a result of a healthcare crisis.
Speak to your broker
If you have any queries or uncertainty about co-payments, our friendly consultants at the CompCare contact centre will gladly assist. For further information please don’t hesitate to contact us on 0861 222 777.
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