Medical aid as cross subsidy


Medical aid is a form of insurance where members pay a monthly fee (called a contribution or premium) in return for financial cover for medical treatment or related medical expenses when the need arises.

Medical aid members contribute money into a pool on a regular basis to cover health related expenses for any one of the contributing members as and when the need arises.

The medical aid concept operates on the principle of cross subsidy. The well subsidise the sick, and the young subsidise the old.

Due to the nature of healthcare interventions often required, a contributing member may easily exhaust their own contributions and they go onto benefit from contributions made by others contributing into the pool.

Medical aid coverage is crucial in people’s lives.

It is important to have a financial fall-back plan when emergency health situations arise, rather than to be caught unaware and not financially prepared.

It is important for people to value investing in healthy and productive lives instead of only focusing and investing in death and burial.

Belonging to a medical aid scheme

There are different medical aid schemes to choose from in Zimbabwe. People can choose cover that suits their needs and their budget.

What is a waiting period?

Medical aid societies impose waiting periods for various healthcare services when a new member joins. This is a period during which a member will pay monthly subscriptions but will not be entitled to claim any benefits.

These are put in place to allow new members time to contribute to the pool before benefitting.

It would be unfair to existing members for a new member to join and immediately start benefitting. It is important to “sow before reaping”.

Waiting periods in Zimbabwe normally depend on the kind of services to be rendered with three months being the common minimum period for one to start receiving treatment while other high value services such as specialist services, hospitalisation, maternity services, spectacles, hemodialysis, chemotherapy and orthodontic have longer waiting periods.

Waiting periods also vary from one medical aid society to another.

It is also important to note that new-born babies joining medical aid are not affected by waiting period provided they join within the period stipulated by the concerned medical aid society.

What is a shortfall?

This is the difference between the cost that a healthcare service provider charges a medical aid patient for services rendered and what the member’s medical aid society pays in terms of its rules and agreed fees or tariff structure.

If the service provider’s cost is greater than the fee of the medical aid society, the excess becomes a shortfall which the service provider may collect from the patient or may choose to waiver.

Shortfalls can also be due to waiting periods, where members may not be eligible to access funds for certain procedures or services at the time, even after the general waiting period therefore the need for them to settle the difference.

Shortfalls may also arise when members have exhausted their benefit limits for a given year. Different packages have different limits, and some benefits are subject to yearly limits therefore when exhausted, a shortfall will arise.

Members are encouraged to know their waiting periods and benefit limits for some procedures and also to enquire from their medical aid societies on where they can get healthcare service at minimal or no shortfalls.

Why should people be on medical aid?

Medical aid coverage;

  • Lessens the financial burden on healthcare service costs when one’s health or a loved one’s is threatened.

It is quite evident that healthcare costs are extremely high these days and just one treatment can deplete any emergency funds that people may have. This is where medical aid coverage comes in.

  • Helps members to get early treatment and regular health checks, rather than waiting for one to get sick. One does not need to visit healthcare practitioners only when sick, but also for health checks.
  • Gives members the preference of going to an institution of choice. Medical aid schemes offer various packages to their members from the lowest to the highest plan, which enables people with different budgets to choose accordingly.

Choose living a productive life before death!

Your health is your wealth!


l Article written by: Association of Healthcare Funders of Zimbabwe (AHFoZ)

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