The high quality of the private healthcare cover available to patients throughout the nine provinces can be largely attributed to the legislation entrenched under the terms of the Medical Schemes Act (131 of 1998). The Act also established the statutory body now responsible for the regulation of medical aid providers in South Africa, known as the Council for Medical Schemes or CMS.

It is worth noting that local insurance companies also offer a rather limited form of cover for this purpose. These companies are, however, not bound by any regulations imposed by the CMS. Instead, their limited healthcare products tend to be subject to the same constraints applied to their other short-term products, such as motor insurance.

One of the most far-reaching consequences of this difference is that while the nation’s insurance companies are perfectly free to deny an applicant healthcare cover or to penalise any applicant who appears to pose a high risk, with a higher premium, medical aid companies in South Africa are not permitted to refuse a prospective member cover.

Nevertheless, the heightened risk posed by members with pre-existing conditions must be addressed somehow. In such cases, cover for a pre-existing condition is withheld for the first year of membership and only other, unrelated claims will be paid. For example, a new member of a scheme who is 3-months pregnant when joining will not receive cover for maternity-related services during the current membership year. On the other hand, should she develop pneumonia or appendicitis, her costs will be covered to the extent agreed by her medical aid scheme and approved in South Africa by the CMS.

That said, these schemes are subject to the same statistical principle of shared risk as short-term insurers. This principle is founded on the statistical probability that the claims from those responsible for the majority of their premium income will be minimal, thus leaving sufficient surplus cash to settle the larger claims of the few and with some in reserve.

For the insurance companies, much of that surplus will provide bonuses for their top executives and dividends for their shareholders. By contrast, medical aid providers in South Africa are required to operate as not-for-profit companies and to utilise their surplus to meet operating costs and to maintain a cash reserve equivalent to at least 25% of their annual premium income.

To ensure affordable, quality cover for as many members as possible, medical aid schemes in South Africa offer a range of products with benefits appropriate to their members’ needs and available budgets.

Medshield Medical Scheme has seven benefit options that caters for each individual, no matter where you are in your financial and health journey.