South Africans are paying more than they should for healthcare despite being on medical aids. Out-of-pocket healthcare costs are quietly becoming one of the biggest financial pressures facing South African households and few things are more frustrating than discovering you’re responsible for a hospital bill you assumed was covered. If medical aid is supposed to protect you from unexpected healthcare costs, why are so many members still digging into their own pockets? This August is National Savings Month, let’s talk about how you can save yourself from unforeseen medical expenses by making sure your medical aid is the right fit for your needs.
What does ‘out-of pocket’ actually mean when it comes to medical aid?
When you hear “out-of-pocket”, there might be some confusion. Medical aid out-of-pocket costs in South Africa are healthcare expenses that you pay yourself, rather than costs covered by your medical aid, insurance, or another healthcare provider. In some cases, your medical aid will pay a portion of a bill, and the rest is yours to cover. That portion for you is called an “out-of-pocket” expense. These costs are often predictable as they mostly occur due to rules clearly set out by your medical aid.
The main categories of medical aid out-of-pocket costs in South Africa
Your medical aid premium is just the beginning of your health-related bills if your medical aid doesn’t fit your needs. The category of expenses that your medical aid doesn’t pay, the out-of-pocket costs, include:
Co-payments
Medical aid co-payments in South Africa are one of the quickest ways additional medical expenses can add up. It is an upfront portion of a medical bill that you must pay yourself. It applies when your medical scheme does not cover the full cost of a treatment, procedure, or medication.
Mrs Koekemoer was referred for an MRI at a facility her scheme hadn’t pre-authorised. Her plan required a R850 co-payment for that admission. She didn’t know until she checked in.
These payments are usually made upfront before the service takes place. It is important to be aware of these beforehand, so you are not caught off guard.
Scheme rate shortfalls
Scheme rate shortfalls, also referred to as medical aid balance billing, occur when your healthcare provider charges more than your medical aid is willing to pay leading to a medical aid shortfall.
Mr Dlamini saw a specialist who charged R3,200 for a consultation. His scheme’s rate for that procedure was R1,800. He walked out owing R1,400 that no claim would cover. This is called a shortfall.
Doctors and specialists can charge up to five times the amount your medical aid is willing to cover, leaving you to pay the balance.
Depleted Medical Savings Account (MSA)
Have you ever logged onto your medical aid app or online profile only to discover your medical aid savings account has been depleted? Or worse, a note on a bill that says “Savings depleted. Member to pay”.
Nandi’s MSA was empty by late July. She had four months of GP visits still ahead of her before December. At roughly R400 a visit, that added up to over R1,600 in expenses her scheme could no longer help with.
This is common and by this time of the year, most MSA’s are low or empty leading to out-of-pocket expenses and bills you didn’t see coming.
Out-of-network penalties:
Your medical aid partners with certain service providers, like hospitals, GPs, specialists and even pharmacies, who have often negotiated better rates on your behalf. Using these providers, known as in-network providers, reduces or even eliminates out-of-pocket expenses in most cases. Use a provider that doesn’t have this agreement with your scheme, and you are in for a surprise bill as an out-of-network penalty, often in the form of an out of network co-payment.
Read more about how DSP networks work and what they mean for your costs in our DSP explainer blog.
Benefit sub-limits:
With all medical aids there is an allotted amount of a certain category of cover they are willing to pay for; this is called a benefit sub-limit. A sub-benefit limit (or sub-limit) is a strict cap your medical scheme places on the amount it will pay for specific medical procedures, treatments, or devices. Even if you have ample funds in your overall annual limit, you cannot claim more than the specified sub-limit for those particular items. Once a sub-limit is reached, you are personally responsible for paying any remaining costs until the limit resets.
Mrs Petersen’s dental benefit had a R3,500 annual sub-limit. She used it up by June. A crown he needed in September came entirely out of her own pocket.
What you can do about it
If you are looking at how to reduce medical aid costs, you can be mindful of these out-of-pocket expenses by reading your policy closely and making sure you adhere to the rules and regulations related to your specific medical aid plan. Remember, each provider and plan differ significantly. If you would like to investigate other alternative medical aids you can compare them using our comparison tool.
How to reduce out-of-pocket medical aid costs
When choosing a medical aid or switching to another one, remember that looking for the cheapest medical aid might mean higher costs down the line. The cheapest medical aid is not always the one that offers the best value. Compare medical aid plans in South Africa here. There is even more you can do, though, to reduce your out-of-pocket spend. These include:
Asking for generic medication
Generic medication has the same active ingredients and safety standards as original brand-name drugs, but it often costs substantially less. Most of the time over-the-counter medication comes from your MSA and asking for generics prevents your day-to-day medical savings from depleting so quickly.
Claim your tax credits
Lower your overall tax burden through the Medical Scheme Fees Tax Credit (MTC), which reduces the amount of tax you owe SARS each month for certain medical expenses. Find out more about this here.
Manage your chronic medication
If you seem to be paying too much for medication you buy every month there is a good chance it is not registered properly. South African medical aids are obligated to cover medication for conditions on their Prescribed Minimum Benefits (PMB) list. What you might find is the case, however, is that your chronic medication needs to be registered with the medical aid before it will pay for it from your chronic benefit. If it is not registered, this could lead to unforeseen and unnecessary expenses.
Final thoughts
Out-of-pocket medical aid costs are more than just an inconvenience, and they can quickly turn into a financial burden that can easily erode your savings if you’re not prepared. From co-payments and scheme rate shortfalls to depleted MSAs and out-of-network penalties, these expenses highlight why choosing the right medical aid is about more than just the monthly premium.
The good news is that with careful planning like opting for generic medication, registering your chronic medication, and making use of tax credits, you can significantly reduce these unforeseen expenses and even save thousands in the long run. After all, that’s why you have a medical aid. National Savings Month is the perfect reminder to reassess your plan, understand its limits, and ensure it truly protects you when you need it most.
Ultimately, the smartest way to safeguard your health and your wallet is to stay informed, compare options on medicalaid.co.za, and align your medical aid with your actual needs, because saving money shouldn’t come at the expense of your peace of mind.