19/05/2021
*Medical aid terms explained*
Deciding on the best medical aid option can be difficult, not least because some of the medical aid terms sound like they’re in a foreign language. We elaborate on the most common medical aid terms to help you.
*Prescribed Minimum Benefits or PMBs*
This is a list of 270 medical conditions (including HIV/AIDS, cancer and strokes) and 25 chronic conditions (such as diabetes, asthma and high blood pressure) for which all medical schemes have to provide diagnostic and treatment cover to a legislated standard of care, regardless of the benefit option that you’re on. You will have to register with your medical aid as a PMB user with the necessary supporting paperwork from your practitioner.
*Out-of-hospital/day-to-day cover*
As the terms suggest, these are your medical costs that do not involve a stay in hospital, such as visits to your GP or treatment and medicine for colds and other common ailments.
*Pre-authorisation*
This refers to the prior consent – in the form of a pre-authorisation number – that you require from your medical aid if you are going into hospital for a scheduled or pre-arranged procedure.
*Formulary*
This is the list of medicines that your medical aid has approved to treat certain diseases.
*Co-payment*
These are the out-of-pocket payments you would have to make for the shortfall between what your medical aid will cover and what your healthcare provider charges. Note: Healthcare providers are not obliged to charge medical aid rates, and their fees can be higher than what your scheme will cover, so it’s worthwhile finding out what this difference will be before your consultation. In certain situations, medical schemes will waive the co-payment if you don’t have another treatment option, other treatments haven’t worked or it’s an emergency.
*Emergency*
An emergency is defined as when immediate treatment by a healthcare professional is required to save your life or to prevent long-term health deficits.
*DSP*
Otherwise known as designated service providers, this is a network of healthcare providers with whom your medical aid has negotiated special rates. If you choose a provider outside this network on certain plans, you’ll be liable for the bill. Of course, there are always exceptions to the rule. For example, if you live in an area where there is no DSP nearby and you have to use a doctor outside of the network, your medical aid will cover those expenses.
*ICD codes*
This refers to the International Code of Diseases and Related Problems, which basically classifies every medical condition and diagnosis, so that your medical aid can identify and allocate the payment to the correct benefit. By law, your healthcare provider has to include the appropriate code on your bill.
*LATE-JOINER PENALTY*
In very simple terms, medical aids rely on a pool of healthy members to subsidise older and sicker members. Therefore your premiums are higher if you join a scheme at age 35 or older – you’re perceived as being a bigger risk – and have not been a member of one or more medical schemes before 1 April 2001, or have had a break in membership of a scheme for longer than three consecutive months since that date.
*Threshold*
If you have a savings account attached to your plan, your day-to-day medical expenses are paid out of that savings account up to a predetermined limit. Should you exhaust your savings account, you will be responsible for future bills, but when these bills reach a prescribed amount or threshold, then your medical aid takes over again to a certain limit.
*Waiting period*
When you join a medical aid for the first time or haven’t been a member for 90 days, you’ll be subjected to a waiting period before you can start claiming from your scheme. This is normally three months. If you have a pre-existing condition such as cancer or are wanting to claim maternity benefits, then you’ll have to wait 12 months.
*NHRPL*
The National Health Reference Price List (NHRPL) refers to tariffs and regulations related to certain healthcare products and services published by the Department of Health. All medical schemes are obliged to adhere to these guidelines by law.
*What is medical insurance?*
The key to understanding the two types of cover is knowing what each one involves. Medical insurance usually pays a set amount out for every day you spend in hospital or a maximum set amount for each incident. This is a fixed amount that does not pay attention to the type of medical treatment you may need. Medical insurance payments are made to you directly and you then settle any fees or bills afterwards.
It is worth noting that the money can be used to pay for costs associated with any treatment as well as other expenses occurred while in hospital. Medical insurance can also cover you for more day to day medical expenses such as GP visits. In most cases though, this cover will be fairly limited and you may have to bear most of these personally. When thinking of taking out insurance in this area, cost is also a factor due to medical insurance usually costing less than medical aid. You must be aware though that this lower cost is due to fewer benefits and cover being included in an insurance
*What is medical aid?*
Medical aid, on the other hand, offers something different altogether. This gives in-hospital protection and pays out for any treatment needed in conjunction with the specified medical tariff scheme. Any payments here are normally made directly to the service provider and/or hospital involved. This is preferable for some who do not want the hassle of sorting out payments themselves with providers.
As with insurance, medical aid also covers daily medical costs like GP appointments or buying medication. Medical aid does offer more in this area though and can offer more comprehensive daily cover, depending on the type you have. In some cases, certain providers may still require you to pay for daily expenses and then claim back from your aid package. As noted above, medical aid normally costs more to take out than medical insurance. This is because it provides more comprehensive cover and more benefits usually.
