Perhaps you regularly see the advertisement on TV for medical insurance that promises to pay out thousands of rands should you land in hospital. Although medical insurance is slightly cheaper than belonging to a medical fund, a medical fund offers several other benefits.
A medical fund offers cover if you land in hospital but, depending on the option you choose, it could also include doctors’ fees, medication and visits by specialists. With medical insurance, on the other hand, they only pay if you are admitted to a hospital.
Let us compare a medical fund to medical insurance:
- Anybody can belong to a medical fund regardless of age and health.
- If you belong to a medical fund, the fund is obliged by law to pay for Proposed Minimum Benefits. This includes all emergencies, a list of 270 medical conditions and 25 chronic conditions.
- All hospital-related costs are covered by your medical fund (depending on the option you choose).
- If you land in hospital, the medical fund wil contact the hospital and the account will be paid on your behalf.
- Medical funds are supervised by the Medical Schemes Council (MSC), which can be contacted if you experience problems with your medical fund.
- With medical insurance the insurer may charge higher premiums for age and certain medical conditions.
- Most providers of medical insurance do not pay for Proposed Medical Conditions.
- Although medical insurance pays for certain expenses when you land in hospital, this normally excludes certain expenses such as doctors’ fees, medication and laboratory tests.
- With medical insurance the amount for your medical costs is paid to you directly. It therefore becomes your responsibility to pay your medical accounts.
- The ombudsman can be contacted if you experience problems, although they are slow to deal with matters involving small amounts.
The following is an example to further illustrate the difference between a medical fund and medical insurance:
Christian is a 28-year-old businessman. He belongs to a medical fund.
Anzel is a 26-year-old designer. She has medical insurance.
Both are involved in serious car accidents and are hospitalised for 10 days. The hospital expenses for both amount to R250 000.
Christian (medical fund):
- Christian pays R1 500 per month to belong to his medical fund.
- After the accident Christian is immediately taken to one of the hospitals in his medical scheme’s network.
- Christian enjoys the benefits of his medical scheme from the moment he is admitted to the hospital.
- Christian’s hospital account is paid by his medical fund.
Anzel (medical insurance)
- Anzel’s medical insurance is slightly cheaper – she pays R900 a month.
- Anzel first has to pay R50 000 before she can be admitted to a private hospital.
- Anzel’s medical insurance pays R3 000 for each day in hospital. She therefore gets R30 000 when she is discharged from hospital.
- Anzel has to pay her hospital account of R250 000, but she was only paid R30 000.
It may therefore look tempting to get thousands of rands if you land in hospital, but with rising medical costs it is still a better option to belong to a medical fund, even if you choose a hospital plan.