Some medical aid policies come as “off-the-shelf” deals, with set premiums and coverage options. However, it’s more common that a medical aid company will calculate your premium, adjusting a base rate in accordance with various factors. These factors typically include your details as a member, the benefits being offered by the insurer and the extent of the insurer’s network of healthcare providers.
1 – The Member
Applicant age: Your age is an important factor in calculating your premium. Younger adults typically have lower monthly premiums, given that on average, they’re expected to require medical attention less frequently than those who are older.
Lifestyle: Medical aid providers are allowed to take certain lifestyle choices into account during the underwriting process. Smokers tend to have higher premiums, as do people with particularly risky hobbies, like sky diving or drag racing.
Sex: On average, medical expenses increase steadily with age for males. For women, however, medical expenses often peak between the ages of 25 and 45, due to child-birth and associated tests and issues. This may be reflected in the premiums that health insurers calculate.
Body type: Your height, weight, exercise choices and eating habits may be taken into account by health insurance providers, although the exact affect of each of these factors on your overall premium will differ from one provider to another.
2 – The Benefits
The benefits included in a particular policy – or what the medical aid agrees to cover you for – are the most significant factor in determining your monthly premium. Among the factors that vary from one policy to another are
- deductibles: the total amount of money you need to pay for a medical procedure before the insurance provider will pay a share
- co-pay: a set amount (not a percentage) that you will have to pay towards a medical expense if you seek treatment outside of your medical aid’s network or choose to see a specialist not included in your plan
- co-insurance: the ratio between the healthcare costs you’re liable for paying and those that the insurer will cover; for example, a 75/25 co-insurance means that if you were rushed to an emergency room, your medical aid would cover 75% of the costs while you paid 25%
- out-of-pocket expenses: the total amount you pay, including co-pay, co-insurance and deductibles
- maximum: the total amount you pay annually to the medical aid
3 – The insurer’s network
The number and range of health care providers in a medical aid’s network will have an impact on your monthly premiums. In general, a medical aid with a narrower network will offer lower premiums than one with a more extensive network.
Given all the factors and complexities involved, it can be difficult to compare different medical aid policies. However, online health-insurance comparison and calculation tools can make the process far simpler.
Another excellent resource for consumers for anything to do with medical schemes or medical aids is the Council for Medical Schemes; a statutory body that was established specifically for the supervision of private medical aids.