Medical Aid Explained Without the Jargon

By the end of this guide, you should understand:

• What a medical scheme is.
• Why the terms medical scheme and medical aid are both used.
• How medical schemes are funded.
• What a benefit option is.
• Who members and dependants are.
• What medical schemes may pay for.
• What Prescribed Minimum Benefits (PMBs) are.
• Why medical aid does not necessarily mean every healthcare cost will be paid.
• Why a medical scheme and its administrator are not necessarily the same thing.
• Who regulates medical schemes in South Africa.
• What you should investigate before choosing a medical aid option.

A medical scheme is a regulated healthcare funding arrangement.

Members pay contributions into the scheme, and the scheme uses its funds to pay healthcare benefits according to the law and its registered rules.

Depending on the benefit option, these benefits may include healthcare such as:

• consultations with doctors and specialists;
• hospital treatment;
• prescribed medicine;
• chronic healthcare;
• medical tests;
• certain dental and optical services; and
• other healthcare services.

Exactly what is paid, and under what circumstances, depends on the law, the scheme’s registered rules and the particular benefit option.

This is one of the most important things to understand about medical aid:

Belonging to a medical scheme does not mean that every healthcare service or every amount charged by a healthcare provider will automatically be paid in full.

In everyday conversation, South Africans usually use the term medical aid.

The legal term used in South African legislation is medical scheme.

Throughout the Curalern Knowledge Centre, we may use both terms, while using medical scheme where the legal distinction is important.

Medical schemes operate by pooling members’ contributions.

Members pay contributions to the medical scheme, and these funds are used to provide healthcare benefits according to the law and the scheme’s registered rules.

This is different from simply putting money aside in your own bank account for healthcare.

Some benefit options may also include a medical savings account for certain day-to-day healthcare expenses.

A medical savings account works differently from the pooled benefits of the medical scheme. We will explain medical savings accounts separately in a later guide.

A medical scheme may offer more than one benefit option.

The benefit option you choose determines many of the benefits, rules and costs that apply to your membership.

Different options may differ in areas such as:

• monthly contributions;
• hospital arrangements;
• day-to-day healthcare benefits;
• provider networks;
• medicine benefits;
• co-payments;
• medical savings accounts; and
• benefit limits.

This means that two people can belong to the same medical scheme but have different healthcare benefits because they have chosen different benefit options.

The name of the medical scheme therefore does not tell you everything about your medical aid benefits.

You also need to know which benefit option you have chosen or are registered on.

A medical scheme membership has a member, often referred to in everyday use as the main member, and may also include registered dependants.

The member is the person in whose name the membership is registered.

Depending on the scheme’s registered rules and eligibility requirements, dependants may include people such as a spouse or partner, children and certain other eligible family members.

A family relationship on its own does not automatically mean that someone is covered.

A dependant must be properly registered with the medical scheme and meet the applicable eligibility requirements.

The rules can differ depending on the circumstances, so it is important to check the requirements of the particular medical scheme.

What medical aid pays depends on the member’s benefit option, the healthcare service involved and the applicable rules.

Medical schemes may provide benefits for healthcare such as:

• doctors and specialists;
• hospital treatment;
• medicine;
• chronic healthcare;
• pathology and radiology;
• maternity care;
• mental healthcare;
• dental treatment;
• optical care; and
• other healthcare services.

However, the fact that a healthcare service falls into one of these categories does not automatically mean that every service or every cost will be paid.

Payment can be affected by the particular benefit option and rules that apply.

These may include provider networks, scheme tariffs, authorisation requirements, co-payments, benefit limits and other conditions.

An important part of the medical-scheme system is Prescribed Minimum Benefits, commonly known as PMBs.

Every medical scheme benefit option must provide the PMB benefits required by law.

PMBs include defined healthcare relating to certain medical emergencies, specified medical conditions and a list of chronic conditions.

There are rules governing how PMB benefits work, including circumstances involving designated service providers, treatment protocols and medicine formularies.

Because PMBs are an important and more detailed subject, we will explain them fully in a separate Curalern guide.

Having medical aid does not automatically mean that every healthcare account will be paid in full.

A healthcare provider charges for the healthcare service provided.

The medical scheme pays benefits according to the law, its registered rules and the member’s benefit option.

Those amounts may not always be the same.

What the medical scheme pays can be affected by factors such as:

• what the healthcare provider charges;
• the amount payable under the scheme's rules;
• whether a provider network applies;
• whether authorisation was required;
• whether a co-payment applies;
• whether a benefit limit has been reached; and
• whether particular legal requirements, including PMB requirements, apply.

Depending on the circumstances, you may be responsible for paying the amount that remains after the medical scheme has paid its portion.

This is why it is important to understand the rules and benefits of your particular option.

You will encounter certain terms frequently when looking at medical aid.

For now, you only need to understand their basic meaning.

These terms can have important consequences for what the medical scheme pays and what you may have to pay yourself.

We will explain them individually in later Curalern guides.

The medical scheme and the administrator are not necessarily the same thing.

The medical scheme is responsible for providing benefits to its members according to the law and its registered rules.

An administrator may perform services for the medical scheme, such as processing claims, maintaining membership records, operating call centres and providing digital services.

Because members may deal mainly with an administrator’s website, app or call centre, it can sometimes appear that the administrator is the medical scheme.

Understanding which medical scheme you actually belong to is important, particularly when checking benefits, understanding scheme rules or dealing with a complaint.

Medical schemes in South Africa are governed primarily by the Medical Schemes Act and its regulations.

The Council for Medical Schemes (CMS) is the statutory regulator of medical schemes in South Africa.

Medical schemes must operate within the applicable legal framework and their registered rules.

The CMS also plays an important role in protecting the interests of medical-scheme members and beneficiaries.

We will look at complaints, disputes and the role of the CMS in more detail in a separate Curalern guide.

Before choosing a medical scheme or benefit option, look beyond the monthly contribution.

Some of the questions worth investigating include:

• Is the medical scheme registered?
• Which benefit option are you considering?
• Which hospital arrangements and provider networks apply?
• How are day-to-day healthcare costs funded?
• What medicine benefits are available?
• What co-payments or benefit limits may apply?
• What authorisation requirements apply?
• How are PMBs managed?
• Could waiting periods apply?
• Who qualifies as a dependant?
• What healthcare costs might you still have to pay yourself?

The cheapest monthly contribution is not necessarily the lowest overall healthcare cost.

The important thing is to understand what you are paying for, what benefits are provided and what costs may remain your responsibility.

The most important ideas are:

• Medical aid is the familiar everyday term, while medical scheme is the legal term.
• Members pay contributions into a registered medical scheme.
• Medical schemes may offer different benefit options.
• Two members of the same medical scheme can therefore have different benefits.
• A membership may include the member and eligible registered dependants.
• Every medical-scheme benefit option must provide the PMBs required by law.
• Medical aid does not automatically mean every healthcare cost will be paid in full.
• Networks, co-payments, authorisation requirements and benefit limits may affect what is paid.
• The medical scheme and its administrator are not necessarily the same thing.
• Medical schemes are regulated by the Council for Medical Schemes.
• Understanding your particular benefit option is just as important as knowing which medical scheme you belong to.

You now understand the basic structure of medical aid and how medical schemes work.

The next guide looks at another form of healthcare funding:

MG004 – Health Insurance Explained Without the Jargon

Health insurance works differently from medical aid. MG004 will explain what health insurance is, how its benefits work and why understanding the policy is important.

Later, in MG005 – Medical Aid vs Health Insurance: Understanding the Difference, we will bring the two together and compare them directly.

We’ll take it one step at a time.