Demystifying Medical Aid Mumbo Jumbo


Do you get irritated when people mention medical aid terms and terminology to you and you don’t know what they mean?

The medical aid industry has become more and more complex, what with PMBs and chronics etc. the list goes on and on.

To help you navigate the medical aid industry’s jargon, we give you a list of the most commonly used terms below.

I have tried to make them as simple as possible in the interests of keeping things brief.

Common Medical Aid Terms

PMBs: Prescribed Minimum Benefits

There are around 270 conditions that schemes are required to pay for, at cost (what is charged by the provider). These include 25 chronic conditions.

Schemes can require that you use a designated service provider for these conditions (a company or doctor that they have contracted with to provide the services).

To explain slightly further: let’s assume you have asthma as an example… this would be a chronic condition and a PMB.

The diagnosis, treatment and medication for this condition would therefore need to be paid at cost (unless you are required to use a specific provider) and the cost of medication should not be coming from your savings account, or from your pocket if you only have a hospital plan.


A chronic condition is one which can be life-threatening if not managed/treated on an ongoing basis, e.g. hypertension (requires ongoing medication).


DSP refers to a designated service provider (see PMBs above).


A formulary is a list of prescribed drugs/medication which are available for specific conditions.

Some medical aid schemes will have different formularies for the same conditions, depending on your plan type. i.e. the more expensive medication on the more expensive plan types.

Hospital Plan

This is a type of medical aid plan that only has hospital cover. It does not have any out-of-hospital cover or benefits (e.g. general practitioners).

However, note the Chronics and PMBs above. You can still get a chronic condition (that is also a PMB) paid from a hospital plan (like asthma in the example above).

[tip title=”moneysmart tip”]A hospital plan is not an “insurance” product (where you get cash for hospital stays)- this is often confused.[/tip]

ICD10 Code

These are codes which healthcare providers are required to put on your invoice. Each condition has a specific code.

The code allows for your medical scheme to correctly pay the claim (from the correct medical aid benefit- depending on your plan).

They are important as they also allow schemes and the Council for Medical Schemes to have statistical data surrounding conditions and treatment.

Late Joiner Penalty

This is a penalty that can be applied to a person joining a medical aid scheme. If you are over the age of 35, this can be applied.

The size of the penalty will depend upon the number of years of previous medical aid scheme membership you have had.

A late joiner penalty is at the medical aid schemes discretion, so there can be instances where it is not applied.


This refers to where a medical aid scheme has negotiated tariffs with service providers. The scheme may require that you use this network (to keep costs down), depending on your plan type.

In the comments below let us know of any other medical aid terms and or terminologies that you’re confused about.


About Author

Kenny Williamson is the owner of He has a certificate in Financial Planning from Milpark Business School and has been active in the Financial Planning environment with an independent brokerage for the last 9 years.