Medical Aid: terms you need to know

Reviewing your Medical Aid once a year matters. Benefits, savings amounts and medical costs tend to change annually, and you need to check your plan is still doing what it should. Before that though, it helps to get comfortable with the terminology.

Here's a plain-English guide to the terms you'll come across most often:

Understanding Medical Aid schemes

Medical Scheme: the company that administers the plan you're on. It's not the same as your Medical Aid Plan, though people often use the terms interchangeably.

Medical Aid Plan: the specific option you've chosen within a scheme, covering things like hospital stays, medicines and doctor's visits. Some of South Africa's medical schemes include Bestmed, Bonitas, CompCare, Discovery Health, Fedhealth, Keyhealth, Medihelp, Medshield, Momentum Health and Profmed.

Council for Medical Schemes (CMS): the regulator that oversees every registered scheme in the country. If you're ever unsure whether a scheme is treating you fairly, the CMS is who to contact.

Medical Schemes Act: the law (Act 131 of 1998) governing what schemes can and can't do, and what benefits they must offer.

How your contributions (Medical Aid premiums) are used

Medical Savings Account (MSA): a portion of your monthly contribution, usually 15% to 25%, set aside for day-to-day costs like GP visits, specialist consultations and out-of-hospital medicine. It's your money, but you can't spend it on anything you like (vitamins and baby products are common exclusions).

Co-Payment: the amount your scheme asks you to pay towards a procedure or medicine. You're more likely to face one if you use a provider outside your network.

Self-Payment Gap: the point where your MSA and day-to-day benefits run out for the year, leaving you to cover further out-of-hospital costs until your benefits renew. It catches members off guard, so check your scheme's limit upfront.

Medicine and treatment cover

Acute Medicine: treatment prescribed for a short period, usually paid from your MSA rather than your chronic benefit.

Chronic Condition: a condition lasting longer than three months. Cover depends on whether it's on your scheme's Chronic Disease List.

Chronic Disease List (CDL): a list of 26 chronic conditions that every scheme must help pay for by law, regardless of which plan you're on.

Formulary: the list of medicines your scheme has approved to treat a specific illness. Medicines outside the formulary may cost more or may not be covered.

International Classification of Diseases (ICD) Codes: used by your doctor to record your diagnosis when motivating for cover, so your scheme knows exactly what it's approving.

Rules that protect every member

Prescribed Minimum Benefits (PMBs): a legal list of 271 medical conditions, the 26 CDL chronic conditions and all emergencies that every scheme must cover at least in part, no matter which plan you're on.

Emergency: a sudden, life-threatening event such as a heart attack, stroke or serious injury. Your scheme must legally pay for treatment at any private hospital until you're stable enough to move to a network facility.

Waiting Periods: time you may have to wait before claiming. This could be a general waiting period (specialist visits, say) or a condition-specific one for a pre-existing condition.

Late-Joiner Penalty: an extra amount added to your contribution if you join a scheme at 35 or older without prior cover, or after a break of more than three months. It depends on how many years you went uncovered after turning 35:

Choosing the right network and scheme

Designated Service Provider (DSP): the specific hospital, doctor or pharmacy network your scheme asks you to use for full cover. Visit someone outside this list on a network plan and you'll likely face a co-payment.

Network Plan: a more affordable option that limits you to a defined list of DSPs. It works well if you're comfortable using set providers and less well if you want free choice.

Solvency Ratio: the percentage of accumulated funds a scheme holds against its annual contributions. Regulation 29 of the Medical Schemes Act sets the minimum at 25%. The industry average sat at just under 41% at the end of 2024 (Council for Medical Schemes), so most members are on well-funded schemes.

Medical Aid Tax Credits

Medical Scheme Fees Tax Credit (MTC): a fixed monthly rebate that reduces the tax you owe (it's a credit, not a deduction from your income). For the current tax year (2026/2027), it's R376 a month for you as the main member, R376 for your first dependant and R254 for each further dependant. If you pay through your employer, this is applied automatically via your PAYE. If you pay independently, you claim it on assessment.

Additional Medical Expenses Tax Credit (AMTC): a separate, formula-based credit for large out-of-pocket costs and contributions above a set multiple of your MTC. It's most valuable if you're 65 or older, have a recognised disability in the household, or carry high uncovered medical spend relative to your income.

Hospital Plan or Comprehensive: which is which

Hospital Plan: covers private hospital admissions (theatre, ward fees, in-hospital specialists) and nothing else. No MSA, no day-to-day benefits, though it must still cover PMBs. It's the cheapest tier.

Comprehensive Medical Aid Plan: adds day-to-day cover, GP visits, medicine, dentistry, optometry, usually funded through an MSA, for a higher monthly contribution.

Medical Aid vs Medical Insurance: these get confused often, but they're regulated differently. Medical Aid is a registered scheme governed by the Medical Schemes Act. It must accept you regardless of your health (open enrollment), charge everyone on the same option the same rate (community rating) and cover PMBs in full.

Medical Insurance: is an insurance product regulated separately under the Demarcation Regulations. It usually pays a fixed benefit for a listed event rather than your actual bill, it isn't required to cover PMBs and can be more selective about who it takes on.

Scheme Tariffs and Gap Cover in South Africa

Scheme Tariff: the rate your scheme has agreed to pay a healthcare provider for a given service. Specialists often charge above this rate, sometimes several times over, and the difference becomes your bill unless something else picks it up.

Gap Cover: a separate short-term insurance policy that pays some or all of that shortfall. It only works alongside an active Medical Aid (it isn't a substitute for one) and is capped at an annual limit per person, adjusted yearly for inflation.

Now you can find the best Medical Aid plan for you and your family

Now that the jargon's out of the way, check whether your current plan still fits.

Comparing Medical Aid quotes with Hippo. Hippo shows you the benefits, savings and monthly costs side by side, so you can spot a better deal without wading through scheme brochures.

This article is for informational purposes only and does not constitute financial, legal, medical or insurance advice. Hippo is a comparison site helping you evaluate quotes from trusted South African insurers. Always review policy details before making changes. Quotes are risk profile dependent and subject to annual review. No fees are charged for using Hippo’s comparison service. HAS (Pty) Ltd and HCS (Pty) Ltd are authorised FSPs. Terms and conditions apply.