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Chapter 8 - Labour Law

Medical aid schemes for workers

What is a medical aid scheme?

A medical aid scheme helps members to pay for their health needs, such as nursing, surgery, dental work and hospital accommodation. It is a type of insurance scheme. For this service, members and their employers pay regular contributions to the scheme.

The advantages of a medical aid scheme are that:

• it protects workers if they suddenly have to pay large, unexpected medical costs. They don't have to delay their medical treatment because they don't have any money
• workers get better medical care because they are looked after by private doctors, clinics and specialists instead of overcrowded public hospitals.

The disadvantages of a medical aid scheme are:

• it is expensive and fees are always increasing
• if a worker has dependants in the rural areas it does not help to have medical aid because there are no private health care facilities
• there are often many hidden costs in the schemes. The scheme might only pay a small amount of the costs and the worker has to pay the rest.

The law says that medical aid schemes must pay for these medical expenses:

• all hospital bills
• visits to the doctor and dentist
• medicines
• other medical services like special dentistry and physiotherapy, and so on.

Some schemes offer more than this.

Problems with medical aid schemes

Some schemes only pay a part of the costs, for example 80%. The member must pay the other 20%.

The law sets out the maximum amounts that doctors 'ought' to charge for different services. But doctors may still charge more than these amounts. Medical aid schemes will not pay more than the maximum amounts. Then the worker/member must pay the rest. Often these costs are very high.

Some schemes set limits for benefits. For example, a scheme could set a limit of R720 per year for medicines prescribed by a doctor for a single member. If the member needs to buy more than R720 worth of medicines in a year, she or he will have to pay for any costs of medicines above this limit.

Some medical costs are completely excluded from medical aid schemes. Workers must then pay for these costs themselves even though they are paying into the medical aid fund every month.

What alternatives are there to the medical aid schemes?

Some unions run a medical benefit scheme. This gives the workers greater control over the scheme. Medical benefit schemes can be much cheaper than medical aid schemes. This is because a medical benefit scheme negotiates with a panel of doctors to provide care at lower rates than the rates charged to other patients.

The Trade Union Research Project (TURP) has a booklet called Medical Schemes for Workers. This gives a lot more detail about the different kinds of medical aid schemes and medical benefit schemes. Read this for more information.

See Resources, TURP for their contact details

The Medical Schemes Act (No 131 of 1998)

The Medical Schemes Act came into effect on 1 January 2001. The Act has made the following changes to medical aid schemes:

• there are standard-rate fees for people to join medical aid schemes regardless of their health or age
• there can be no discrimination on grounds of peoples' health, for example, refusing to allow a person to join a medical aid scheme because they are HIV-positive, or because they have asthma or diabetes
• the definition of dependants includes spouses (husband or wife) and natural and adopted children

The new law means that people living with HIV or AIDS can no longer be turned away from medical aid schemes on grounds of their medical condition. The minimum medical benefits included for HIV-related illnesses include hospital admissions as well as necessary medical treatment. The treatment for people with AIDS-related illnesses also continues until death.

The new Act also sets out a complaints procedure for people who have a complaint against a medical aid scheme.

See HIV/Aids and the law