The difference between Medical Insurance and Medical Aid


Medical terms are intimidating but being informed is the best way to get the best care and the most affordable medical cover. The big difference between medical aid and medical (or health) insurance is the lower cost of the latter. If cost is your main concern, then it’s best to apply for affordable health insurance.

Another difference is the day-to-day benefits. With medical aid, those benefits, such as GP visits, are paid out of the savings of the insured person and depend on the amount available on their account.

With medical insurance, the day-to-day benefits are determined by formularies and network providers as tariffs have been pre-negotiated. A formulary is an official list of prescriptible medicines.

Medical aid pays in-hospital benefits according to procedure codes and scheme tariffs. By law, it must cover a list of Prescribed Minimum Benefits. This applies whether you have a comprehensive or basic and more affordable medical aid. It cannot “bundle” any additional benefits onto the premium, like personal accident cover. Benefit amounts are determined by the reason for admission. For example, pneumonia is an illness and the relevant benefit is applicable.