Health insurance payments are risk and age-dependent and is a cheaper option for those who cannot afford medical aid. However, health insurance only pays a set amount for every day spent in the hospital or it provides a limited lump sum and does not consider the type of medical treatment that may be required. Medical aid covers any in-hospital treatment subject to the plan and tariff. Gap cover is an additional insurance to medical aid, which covers any gap between the official price and what the provider charges.
Types of Medical Aid schemes
Medical aid schemes in South Africa consist of open and restricted schemes, which amounted to a consolidated number of 73 schemes as of December 2021. Open schemes are available to all South Africans, whereas membership for restricted medical aids depend on certain criteria. Discovery Health and the Government Employees Medical Scheme (GEMS) are the leading medical schemes, with 2.76 million and 1.92 million beneficiaries, respectively.
Medical schemes have various plans, ranging from comprehensive to hospital plans. The latter covers the insured for hospital stays only, whereas the former covers costs for general practitioners, specialist appointments, and further procedures or tests in addition to hospital expenses.
Medical scheme costs and ageing membership[
The Council for Medical Schemes (CMS) regulates medical schemes in South Africa. Over the last few years, medical scheme costs have been surging, while membership numbers have stalled. The council has therefore recommended that medical schemes raise 2024 prices in line with the inflation rate to prevent current members from canceling their membership due to the financial costs involved. In 2021, the average age of medical scheme beneficiaries increased to 33,7 years, and the pensioner ratio increased to 9.1 percent. Younger members require less benefits than older members, however, they pay the same contributions. For medical schemes to remain sustainable, they must retain and grow their members in the younger age brackets to balance out and support the aging members.
