Chartered Employee Benefit’s Senior Healthcare Consultant, Devlin Ross, helps clients take stock of their medical aid options in this practical article on factors to consider.
The Healthcare industry saw three significant developments this year: the release of the National Health Insurance Bill, the presentation of the draft Medical Schemes Amendment Bill proposal and the release of the Healthcare Market Inquiry provisional report. All of these identified the need for access to affordable healthcare.
Furthermore, the industry experienced its second negative growth figure in 2017 in the number of medical schemes beneficiaries, according to the latest Annual Report from the Council for Medical Schemes.
It seems that the premiums for medical scheme membership have become too high for the majority of South Africans.
There has been a reduction of benefits in the income-based plans, as medical schemes continue to struggle with providing the regulated level (Prescribed Minimum Benefits) of cover at reduced premiums.
Medical scheme premiums are increasing well above inflation year-on-year while benefits are simultaneously being reduced. For this reason, reviewing your Medical Aid plan is an important part of your budgeting process
The following list will help you review your medical aid option:
The fundamental reason members join a Medical Aid is to ensure cover for hospitalisation. Consumers know that the cost of private care hospitalisation can be exorbitant and often financially crippling without the right level of cover.
Most schemes offer unlimited cover for hospitalisation. There are still a few options with overall annual hospitalisation limits that are aimed at providing some level of cover for lower income earners as opposed to no cover at all.
Schemes also provide options that impose restrictions on what hospitals members may use for a planned admission. This allows them to charge a lower contribution. So, if this is your option, make sure that you are familiar with the hospitals on the list.
The new generation plans offer a Medical Savings account that caters for day-to-day expenses, subject to available funds. There a few traditional model options on the market; however, they are generally highly priced. Hybrid options offer a mix of benefits funded from medical savings and risk pools. The extent of day-to-day cover is where most of the variation occurs in terms of options available, and can affect the overall contributions substantially.
This refers to the medical scheme’s rate of reimbursement for related accounts. Schemes can cover from one time, and up to three times, the medical rate, depending on the plan option.
Questions to consider
- Are you comfortable with hospital restrictions for planned admissions?
- Do you have a Gap Cover product?
- What are the total out-of-hospital expenses for everyone on the membership? Tip: Use an average of the last three years.
- What chronic conditions do you require cover for?
- What routine checks and tests do you have done?
- Are there any upcoming expected treatments that you and your family require in the next twelve months?
- Can you afford to pay day-to-day expenses out of your own pocket?
To assist you with your review, you can request these documents from your provider:
- Claims Transaction History Statement
- Self-Payment Gap reconciliation report (if your plan has this component)
- Chronic Benefits Guidelines
- Screening Benefits Guidelines
- Plan Brochures
The most effective way to review your medical aid plan is to compare your plan option and benefits on a like-for-like basis, factoring in your specific healthcare needs in a comprehensive review with your financial adviser.
I trust that you have found Devlin’s guidance useful, especially in the current economic climate, when most of our personal budgets are under pressure.