Private health care in developed and developing nations is largely funded by medical insurance. If it was not for the protection offered to medical insurance members, most would not be able to afford the otherwise costly service in the private health care sector. However, private medical insurance in many developed nations has often proved to be the source of much frustration for consumers. After all, these insurance companies are as profit-driven, avoid risks and look to cut costs in much the same way as any other private enterprise.
One would never think so but South Africa is among the leaders in funding of private health care services. This is largely due to the existence of private medical aids. There are more to these financial products than it being a modified medical insurance plan. Medical aids are privately run non-profit organizations. It is superior to medical insurance in several ways and has greatly contributed to the development of one of the best private health care systems in the world. So much so that private hospital groups in South Africa are now extending their managed health care services to the Middle East and North America.
Medical aid is not just another form of health insurance. Firstly, every person pays the same monthly premium for specific plans irrespective of their health status at the time of joining the scheme. South Africa is known for its massive HIV/AIDS problem. However, with medical aid offerings, even HIV-positive and AIDS patients can join a plan for the same rate as non-positive members. All patients with pre-existing health problems are simply subjected to a waiting period before the scheme will begin covering the costs of treating and managing these conditions. The only time there may be a slight penalty of sorts is if a person joins after the age of 35 years.
Apart from not paying more for a pre-existing ailment, a medical aid in South Africa can also not refuse any person membership based on their health status. Unlike medical insurance plans that sometimes try to short change a member in a bid to keep its profits up, medical aids are not as restrictive. A Prescribed Minimum Benefit (PMB) policy ensures that a person gets access to treatment for a number of chronic illnesses throughout a year irrespective of whether the benefits are exhausted. In addition, medical aids cannot use the contributions of its members in ways to increase its profit. All contributions are pooled together and paid out for the services of ailing members.
As simple as this scheme sounds, they are still financially strong enterprises that are carefully monitored by the South African government and regulatory councils. When one hears of patients being refused life saving drugs, surgery and treatment in developed nations by medical insurance companies, it is baffling how a small developing nation can sustain such an insurance product. South Africa has some 50 million people, with only 20% being able to afford medical aid, yet there are some 100 independent schemes in existence within the country.