The Differences Between Health Insurance & Medical Aid (An Updated Guide)


Jade Poole from I Write Words


If you are unsure as to what the difference is between health insurance and medical aid, then you are not alone. To clear the air and to clearly define the differences, we have put together an expert guide on the topic.

You might know of medical insurance, also known as health insurance as the more affordable alternative to medical aid.

Read: I don’t get it - why is health insurance more affordable than medical aid?

While cost is certainly a big differentiating factor, it isn’t the only thing that sets these two forms of insurance apart.

The thing is, medical aid and medical insurance are two different insurance products. And what’s more, you can have BOTH of them at the same time.

But before we get into the main differences, let’s first define what each of these products is.

Tell me more about medical aid

Medical aid is a form of health cover. What this means is that for a monthly premium, medical aid will help cover the costs of private healthcare.

Medical aid is regulated by the Medical Schemes Act in South Africa and governed by the Council for Medical Schemes. Medical aid schemes are required to stick to a list of rules and regulations, which includes prescribed minimum benefits.

PMBs (prescribed minimum benefits) include the cost of treatment for chronic health conditions and a detailed list of in-hospital medical procedures.

Medical aid DOES NOT include loss of limbs cover or personal accident disability. Medical aid schemes are also not authorised to include death or funeral cover as part of the benefits.

Tell me more about medical insurance

This is one of our favourite questions!

In fact, we wrote a blog article on this exact topic, you can read it by clicking here.

Health insurance works in the same way as medical aid in that it helps protect you from the high costs associated with private healthcare in return for a monthly premium.

Health insurance is regulated by the Long or Short Term Insurance Acts (sometimes under both) and is governed by the FSB (Financial Services Board).

Here’s how health insurance works…

While medical aid covers a set of specific treatments, health insurance will provide you with a lump sum for a specified list of defined risks. In your health insurance policy, you will find a list of specified benefits each with their own monetary value.

Health insurance is more than just a hospital plan. Plans include cover for routine care (preventive healthcare) such as doctor visits and some plans also include specialist cover. As well as this, you will also have cover for accidents, emergencies, loss of limb cover, death and funeral cover.

With health insurance, there are CLEARLY defined limits to your cover.

Differences between medical aid and medical insurance

Medical aid costs more = has to cover the high cost of life-threatening conditions

Medical aid is more expensive than health insurance because it is required by law to cover Prescribed Minimum Benefits (life-threatening conditions). As well as this, medical aid HAS to cover chronic conditions such as cardiac issues, blood pressure, asthma and diabetes, regardless of your plan type.

The amount you are paid out in the event of a claim will depend on the type of medical attention you need.

This means that medical aid includes more comprehensive cover and benefits. Keep in mind, however, that medical aid does not include disability cover, loss of limbs or funeral and/or death cover.

Health insurance is more affordable = set list of benefits and limits

A limit is the maximum amount of money you will receive from your insurer in the event of a claim.

Health insurance is far more affordable than medical aid because as a policyholder, you know exactly what events you are covered for and what the monetary value of these are in the event of a claim. Health insurance does not have to comply with the same rules as medical aid in terms of covering PMBs, making it more affordable.

With health insurance, you will receive a cash payout in the event of a claim. This payout is based on a fixed amount outlined in your policy document. Health insurance lets you know exactly what your health benefits include and what the cash payout will be for these specific benefits.

Have a look at these health insurance plans to get a good idea of what we mean.

If you can afford to have BOTH medical aid and health insurance, then this is a great way to ensure your health and your budget are well looked after.

Health insurance can work as a form of gap cover when your medical aid or medical savings fall short.

Health insurance that pays you before you see the doctor

With us, Oneplan, we front you with the cash you need before your doctor’s appointment.

Medical aids on the other hand often require that you pay your doctor out of your own pocket and then claim back. In some cases, the doctor is part of your medical aid’s network and will bill your medical aid directly.

With Oneplan Health, we do not limit you to a specified network of doctors. You have the choice to go to any doctor you like.

The bottom line

Private medical treatment is expensive and to help you afford to see your doctor and stay in the hospital for accidents, emergencies and illnesses, medical aid and health insurance are the answer.

What it comes down to are your budget and your personal health. If you are in need of affordable healthcare cover that helps you afford to see your doctor and seek emergency treatment, then health insurance is the way to go.

If you are someone who suffers from a chronic health condition and regularly needs medical attention, then medical aid might be more suitable.

Yours in hassle-free health insurance,


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