What Is the Difference Between Medical Insurance and Medical Aid?

Medical aid and medical insurance are two different product types that offer healthcare cover, but are guided by two different sets of regulations.

Medical Aid

Medical aid regulations require that all medical aid products offer a set of minimum benefits known as Prescribed Minimum Benefits. This cover includes 270 in-hospital, life-threatening procedures and 26 listed chronic conditions. Medical aids are also obliged to take on anyone who applies and are only allowed to impose a maximum waiting period of 12 months for cover for a pre-existing condition, depending on history of cover. Medical aids generally have very high or no overall annual limits on private hospitalisation cover. These factors set the starting price for medical aids higher than that of medical insurance products.



Medical Insurance


Medical insurance products were introduced as a more affordable alternative. These products are governed either by short-term or long-term law, and not by medical aid regulations. They therefore do not have to include the prescribed set of minimum benefits and can impose different waiting-period criteria, as well as a maximum entry age limit. To keep these products affordable, they are mostly focused on out-of-hospital primary-care expenses such as general practitioner consultations, prescribed medication, basic dentistry and some optometry cover. These benefits are subject to strict network-provider rules. A defined limit for emergency hospitalisation stabilisation or illness might be included, but this has an impact on the price of the product.



Assess your needs and do the comparisons for a guide on which product type best suits both your financial and medical needs.


Demarcation Regulations


In 2018 the latest Demarcation Regulations were promulgated, a move that clarified the boundaries between medical aid schemes and medical insurance products. Medical aid schemes are governed by the Medical Schemes Act No. 131 of 1998, while medical insurance products fall under the Short-term Insurance Acts No. 53 of 1998.


Key changes to the regulations include gap cover that follows the same requirements as medical aid schemes – including open, non-discriminatory enrolment and waiting periods for specified pre-existing conditions – but is limited to a maximum of R150,000 per annum per insured life.