Why is a medical scheme more expensive if compared to health insurance?
Medical Schemes vs Medical Insurance Products:
Medical Schemes |
Medical Insurance |
| Accepted by private hospital | Only emergencies due to accident |
| Governed by Medical Scheme Act | Governed by Short- and Long-term Insurance Act |
| No maximum entry age | Products have maximum entry ages |
| High in hospital sub-limits | Low rand amounts per day of stay in hospital |
| Full cover of Prescribed Minimum Benefits | Does not have to provide cover for Prescribed Minimum Benefits |
| No or very high overall annual limit | Low overall annual limit |
| Comprehensive Cover for Dread Disease | Dread disease limited to rand amount or events per year |
| Standard prescribed waiting periods | Each product can apply own set of waiting periods |
At CureMED Health & Wealth Consultants we consider ourselves to be your personal financial intermediary and we know that it is a daunting decision to make when considering medical cover, not even mentioning how difficult it is trying to understand the difference between medical schemes and medical insurance.
The main difference is that it is two different products with different benefits and services which should not be compared.
Medical Insurance will come at a far lower cost but will offer fewer benefits. They will have a maximum entry age which is not allowed with a Medical Scheme. Medical Insurance will exclude or limit private hospital cover and cater for basic day to day medical benefits with a dedicated product provider where a Medical Scheme will cover private hospitals at 100% of scheme tariff and day to day cover at any provider. Medical Insurance are not registered under the Medical Scheme Act and do not have to comply to the regulations, but a Medical Scheme is regulated by the Act and this then pose the big reason why the product is more expensive, but there is factors that influence this for example:
A Medical Scheme may not discriminate against anyone who wishes to join except in terms of income and the size of the family. No application can therefore be rejected, the scheme must accept all but can impose a three-month waiting period, a 12-month exclusion regarding any existing medical condition and a late joiner penalty. A Medical Scheme must cover Prescribed Minimum Benefits that includes 270 life-threatening medical emergencies and 26 chronic conditions irrespective of the plan the individual participates in. A Medical Scheme provides comprehensive cover for a variety of in hospital treatments depending on the plan, the hospital is paid directly by the scheme and a member can opt to take gap cover for any shortfalls between the specialist rates charged and the medical scheme rate paid. Medical Insurance will pay the patient directly, who then settles their hospital account but please bear in mind that hospital cost will usually relate to emergencies and accidents and a lump sum is usually paid for days spent in hospital.
In conclusion
Medical Scheme benefits outweigh those of a Medical Insurer and if you compare the two different products as discussed above, it will always be best to commit yourself to a Medical Scheme rather than a Medical Insurer. Budgeting is very important, but your health is more important, do not make the wrong choice.
