Understanding the difference between Health Insurance and Medical Aid

Overtime and in recent years, South Africans are currently unable to rely on the public healthcare system due to its ongoing issues. There is a large disparity between both the quality and access to the national healthcare system. Unfortunately, public hospitals are incapable of providing consistent and quality medical care to South Africans, particularly when it’s needed the most. The national healthcare system faces issues such as; staff shortages, insufficient funds, lack of resources and infrastructure resulting in inadequate medical care. 

Private healthcare is a proven solution to the regularly sub par, medical care delivered by the public health sector. Independent healthcare facilities offer premium healthcare for planned procedures, emergencies and accidents as well as other health services. Private healthcare offers two completely separate and distinguished sectors of independent healthcare services being: Health Insurance and Medical Aid. These two private healthcare coverage options vary significantly in how and what they provide cover for.

Health Insurance vs Medical Aid

The main difference between Health Insurance and Medical Aid lies in the extent of their medical coverage. Health Insurance typically provides coverage for a range of day-to-day health services, each assigned a specified Rand value. Medical Aid requires members to pay a monthly premium in exchange for a set of standardised, comprehensive medical services as well as in-hospital benefits.

Here’s a list of top 8 Medical Aid providers in South Africa

Health Insurance is a cost-effective alternative to Medical Aid. Health Insurance is better suited for daily medical expenses with access to private healthcare, emphasising accident and emergency coverage through an approved provider network. Medical Aid provides extensive health coverage, including chronic care such as Prescribed Minimum Benefits (PMBs) and broader in-hospital cover. 

Health Insurance policies are regulated either under the Short-Term or Long-Term Insurance Act and by the Financial Sector Conduct Authority (FSCA), depending on the insurer’s licence and product structure. Medical Aid policies are registered with the FSCA and accredited by the Council for Medical Schemes (CMS) making it mandatory to provide chronic cover for all 271 PMBs. 

Is Health Insurance superior to Medical Aid or is Medical Aid superior to Health Insurance? Ultimately, the right answer depends on your individualised needs and specific budget. Nevertheless, having either one is certainly better than having no health coverage at all. The process of sifting through large amounts of information from different service providers to reach a conclusion, is a daunting task. That’s why Curemed is #alwaysthereforyou providing personalised solutions to your unique healthcare requirements. 

What is Health Insurance?

Health Insurance is not a replacement for Medical Aid but a budget friendly solution providing access to private healthcare. As previously mentioned, Health insurance is regulated by Short-Term and Long-Term Insurance laws, which differs from Medical Aid legislation. Health Insurance covers fewer chronic conditions and PMBs when compared to Medical Aid.

Similarly to Medical Aid, there may be waiting periods for certain Health Insurance coverage. These waiting periods can apply to various medical treatments or general access to the Health insurance benefits. Health Insurance coverage is activated once the waiting period is over. There are instances where certain health policies have age restrictions, limiting access to individuals beyond a certain age. Which is why it is beneficial to work with independent Curemed Advisors to ensure you select the right Health Insurance based on your individual needs and qualifying factors. 

Health Insurance premiums are often lower than Medical Aid which provides comprehensive cover. There is a significant price difference as Health Insurance focuses on out-of-hospital benefits whereas Medical Aid is geared towards in-hospital benefits. Unlike Medical Aid, Health Insurance offers benefits outside of the medical health realm such as disability cover, death cover and funeral cover. Which is why you can add Health Insurance to your Medical Aid and vice versa. Naturally, including additional benefits results in a higher premium for Health Insurance. 

It is worth mentioning that with Health Insurance, a predetermined amount is allocated to specific medical services. In instances where the limit has been reached, the shortfall becomes the responsibility of the Health Insurance member. The funds for allocated health services, is disbursed to the member or paid directly to the healthcare provider. 

Health Insurance emphasises coverage on day-to-day and out-of-hospital benefits to remain an affordable solution to access private healthcare. Health Insurance typically includes parameters of network providers. Meaning that Health Insurance members need to make use of medical facilities and services within the network or else medical expenses might not be covered by the Health Insurance provider. 

Benefits of Health Insurance:

  • Affordable access to private health care
  • Lower monthly premiums 
  • Financial protection
  • An allocated number of out-of-hospital benefits such as; GP Visits, medication etc…
  • Additional benefits such as disability cover, death cover and funeral cover
  • Select emergency and accident cover
  • Select coverage for a set of chronic illnesses and PMBs
  • Tax deductions

What is Medical Aid?

Medical Aids are regulated by CMS. This legislation stipulates that all Medical Aids are obligated to provide coverage for a standard level of care including 27 chronic conditions (Chronic Disease List (CDL)) and 271 diseases, known as PMBs. PMBs can include diagnoses such as asthma, cardiac conditions, diabetes, hypertension, arthritis etc. Similarly to Health Insurance, waiting periods may apply for various benefits and coverage as outlined in your preferred Medical Aid plan. 

Medical Aids offer extensive medical coverage and broad in-hospital benefits resulting in higher monthly premiums in comparison to Health Insurance. Your monthly contribution is in accordance with the specific Medical Aid you select, along with its accompanying benefits. Medical Aids covers the fee of various health services as stipulated in your individualised plan, in order to minimise out-of-pocket payments. Shortfalls can still occur resulting in the member having to pay out-of-pocket or with additional medical cover such as Gap Cover. 

Service providers are able to make direct payment to health institutions such as hospitals for various medical services or hospitalisation. Certain Medical Aid options require individuals to make use of healthcare facilities/services within their approved network. There are various Medical Aids which allow members to make use of non-network healthcare providers. Medical Aid contributions are eligible for tax deductions in South Africa. 

Specific Medical Aid options offer a Medical Savings Account (MSA). A portion of your monthly premium goes towards funding your MSA. These Medical Savings can be used towards day-to-day expenses and other out-of-hospital services. Any unused funds are carried over to the following year. Should you decide to switch Medical Aid providers, any remaining balance in your MSA will be transferred to the new service provider or refunded directly to you if your new Medical Aid does not have a MSA option. 

Benefits of Medical aid:

  • Access to private health care 
  • Extensive in-hospital cover 
  • Financial protection
  • Additional in-hospital and out-of-hospital benefits
  • Chronic cover for your treatment plan and PMB diagnosis
  • Medical Savings Account (depending on your specific Medical Aid plan)
  • Tax deductions
  • Gap Cover add on

Key Differences Between Health Insurance and Medical Aid

Health Insurance and Medical Aid are two entirely different approaches to private healthcare in South Africa. Both Health Insurance and Medical Aid offer unique benefits suited to your medical needs. Health Insurance provides affordable premiums for day-to-day quality health care with less in-hospital coverage. Medical Aid includes comprehensive coverage with broad in-hospital benefits, PMBs and a wide range of premium healthcare services. Specific Medical Aids offer a Medical Savings Account which can be used for daily health expenses. Health Insurance is cost-effective access to entry-level, quality healthcare whereas Medical Aid offers extensive coverage for a wide range of health services and in-hospital benefits. It is crucial to acknowledge that with Medical Aid, you have the option to add Gap Cover for potential medical shortfalls.

Health insurance vs medical aid
Healthcare Plan:Health InsuranceMedical Aid
In-hospital cover Specified amountExtensive cover
Chronic cover and Prescribed Minimum Benefits (PMBs)Selective coverage for certain chronic conditions 27 chronic conditions, 271 PMBs 
Day-to-day benefitsSpecified amountDependant on option plan
Access to private healthcareSpecified amountExtensive cover
Financial protectionLimitedExtensive
Medical Savings Account (MSA)N/A✔︎
Monthly PremiumsCost-effective, less coveragePremiums reflective of high coverage 
Additional benefitsDeath and funeral coverGap Cover add on
Waiting PeriodsIndividual benefits can have their own waiting periodsWaiting periods can apply to the overall Medical Aid coverage 
Tax deductions✔︎✔︎

Factors to Consider When Choosing Between Health Insurance and Medical Aid

When making the decision between Health Insurance and Medical Aid, one should consider the following: 

  • Individualised needs and those of loved ones 
  • Number of dependants, if any
  • Affordability and financial circumstances
  • Health status and any chronic illnesses or PMBs that need to be covered
  • Planned procedures in the near future
  • In-hospital benefits versus out-of-hospital benefits 
  • Exorbitant hospitalisation fees 
  • Healthcare network providers in your area
  • Necessary out-of-pocket expenses
  • Safeguarding your finances
  • Loyalty programmes 

Customer reviews of Health Insurance and Medical Aid 

The below reviews are customer reports based on various experiences with Health Insurance and Medical Aid. It is evident that one needs to be aware of their individualised medical needs in order to benefit from the best suited option gaining access to private healthcare. The Curemed Advisors are readily available to assist with selecting the right healthcare solution for you and your unique needs.  

Health Insurance Reviews

Scenario 1: 

Mogomotsi M (16 July)

5 Stars 

The best medical insurance

Thanks Company X for your honesty and good business ethics. I would recommend Company X to anyone not affording medical aid visits to the wide network of medical doctors and pharmacies as well as hospital cover all at an affordable price. Thnx again.”

Scenario 2

Regina S (06 April 2024)

1 Star 

Company X refusing any claim from simple blood tests to emergency consult

I have been asking for a call back from Company X for over a week and I’m being brushed off. I moved from my previous Health Insurance and when Company X gave me a follow up call I told them my issues with the previous provider and they assured me they were different. I have been paying close to R2000 a month since April last year. Last month I claimed for blood tests at Lancet and they refused to pay a bill less than what I paid monthly. Last November I had an emergency and I could not use their services at Netcare. I asked for reimbursement and up to now I am waiting. 

I have not had anything approved, anything at all and I have been begging them to call and explain what exactly R20 000 plus has done for me so far and they are ignoring all my concerns. Tomorrow they will take another amount but it is not justified. I’d like my money back so I can pay my hospital bills.” 

Medical Aid Reviews

Scenario 1:

Rina (29 Nov 2023)

5 Stars

“Medical help Company Y

During 2023 I had several medical problems and the assistance and follow up from this medical company was incredible.”

Scenario 2:

Divan S (12 April 2024)

1 Star

**** Medical Aid.

What a *** a lazy Medical Aid. Doesn’t matter what plan. Always pay in at a pharmacy.  And the drs on hello dr and real life are rude. disgrace. 

Please close Company y.”


In summary, selecting the appropriate healthcare plan depends on your individualised needs and affordability. It is essential to recognise the significant differences between Health Insurance and Medical Aid, as each offers distinct advantages and access to private healthcare. Given the limitations of public medical care in South Africa, private healthcare facilities serve as vital resources. Health Insurance is a financially feasible option for accessing private healthcare, whilst Medical Aid provides comprehensive coverage for those who can afford it. While the choice between Health Insurance and Medical Aid may not have a definite answer, the importance of having either cannot be overstated enough in comparison to having no access to private healthcare whatsoever. 

Ready to explore your healthcare options?

Disclaimer: Terms and Conditions apply. This blogpost and the information contained within it is intended for information and consumption purposes only and does not by any means supersede the Rules of the Scheme. In the event of any discrepancy between this mailer and the Rules of the Scheme, the Rules of the Scheme will prevail.


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