What is the difference between medical aid and medical insurance?

February 13, 2016

Medical aid and medical insurance are two very distinct types of cover. Medical aid schemes are governed by the Council for Medical Schemes, while medical insurance is governed by either the Long Term Insurance Act or the Short Term Insurance Act.

Medical aid schemes pay out according to a Medical Scheme Rate (MSR), which differs from scheme to scheme, and which also cover a range of Prescribed Minimum Benefits (PMBs). Medical insurance pays out a set rate for each day that a policyholder is in hospital (usually starting only after 2-3 days of hospitalisation), and it is up to the policyholder to decide how to spend the money (i.e: on hospital expenses, or on expenses incurred whilst in hospital, etc.). Most medical insurance schemes are unlikely to cover PMBs.

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