Private healthcare plans come in forms: each medical scheme has several plans with several options. Choice is good because it allows different needs to be met, but it can make for a difficult and time consuming decision.

The need for medical aid

At first glance medical aid looks expensive. Is it a luxury item or does it meet a real need and offer good value?

When it comes to our health we want the best care. Some public health services offer excellent care, but the quality of care delivered by the private sector is believed to be of a higher standard.

It is always a wise decision to invest in your health and if you are in a financial position where you can afford private medial aid cover, it should be considered.

Taking out medical cover for a group of members has tax advantages for employers, and depending on the number of members, underwriting requirements can be negotiated.

Choosing a scheme

Medical schemes offer lots of information to prospective members. It is important to consider the sustainability of a scheme, its current financial position and current membership. A few numbers to look at include:

Solvency ratio: This tells us how much a scheme holds in reserves and its ability to pay claims. The Medical Aid Schemes Act requires a solvency level of 25%.

Age profile and demographics: A normal pattern of medical expenditure is expressed in higher costs at the beginning and end of our lives. If a scheme has a large number of older members they may have rapidly rising .

Claims ratio and administration processes: Members of medical schemes expect a high quality of care and good administration where claims are timeously paid. A high claim rejection rate needs further investigation.

Past scheme increases: Are annual increases above or below the inflation and salary increase rates? Are the increases similar each year? What is the reason for the increases?

Choosing the right scheme for the individual’s needs

Each potential member should consider what they might need from their medical aid and balance this with what is available and affordable. Some questions to ask are:

• What is the most you can afford to pay for medical cover?
• Do you need a hospital cover only or do you also need cover for day to day medical expenses? How much day to day cover do you need?
• Do you have a chronic condition and how is this covered by the scheme?
• Is there flexibility of providers – do you have to consult selected doctors and hospitals or can you choose your provider?

The role of the consultant

An expert consultant can guide you through the selection process and make sense of all the information available when analysing what makes a particular plan and medical scheme suitable for a group of members.