Before choosing a medical aid (and an option within that medical aid), you need to consider the following points:
Why should I have a medical aid?
In laymen’s terms, the purpose of a medical aid is to ensure that you are able to pay for treatment received from either a GP or specialist, or while in hospital. It is very important to insure your health. Accidents can happen and your and your family’s health never guaranteed. If you cannot afford comprehensive cover, at least a basic hospital plan is recommended.
Needs and financial analysis
When deciding to join a medical aid, first ask yourself what you can afford to spend on the monthly premium. Then look at your and your family’s needs. What is it that you need from your medical aid?
Membership and solvency ratio
It is very important to look at the provider’s membership status and solvency ratio. Some medical aids have a big member base, but their solvency ratio is far below the required 25%. This means the provider is likely to have a bigger premium increase at the end of the year. Solvency ratios may drop annually should a provider have a bad claims experience that year. Other medical aids’ membership might be small, but the solvency ratio is high, which means enough funds are available and premium increases at the end of the year can be expected to be lower than the average in the market.
It is important to know who the administrator is and how efficient he is in offering assistance, client services and paying out claims. There are lots of good products in the market but when it comes to the administration thereof, many medical aids fall short. Ask your broker for assistance with this or visit the Council for Medical Schemes website.
In-hospital benefits, exclusions and co-payments
Before deciding on which medical aid you want to join, you need to look at the cover each one offers you. The most important question is: how are you covered in hospital?
Most providers cover you at 100% of the National Reference Price List (NHRPL) tariff, better known as the normal Medical Scheme rate. Other options cover you at 120%, 150%, 200% or even 300%. This means it is ALWAYS vital to negotiate rates with the medical provider (anaesthetist, specialist, doctor, etc.) If you don’t do that, you will be liable for the difference in costs. The other option is to take out an additional product to cover that cost, like GAP Cover.
Read the fine print!
Study your product brochure to be aware of what is excluded on your option. Some providers will exclude joint replacements or neck and back operations, so it is VERY important to take note of exclusions. You will then know exactly what you are covered for, so that you cannot be “caught with your pants down”. It is also important to be aware of all co-payments. Many providers have co-payments (i.e. covered from your pocket) on certain procedures, like gastroscopies, laparoscopies, removal of wisdom teeth, colonoscopies and joint replacements. The co-payments differ from one medical aid to another, and also depend on whether the procedure is done in or out of hospital.
Most options in the marketplace work with “savings”. These are the so-called New Generation options, where you are given a percentage of your monthly premium upfront for the year. This is available to you immediately, depending on the applicable waiting period.
These “savings” will be used for almost everything outside of hospitalisation and also for any co-payment you might have. Once the savings have been depleted for the year, you will have to pay for the out-of-hospital expenses out of your own pocket. Some products have built-in threshold levels, which can be to your advantage should your claims be high. These are usually the Comprehensive options. You could also decide to join a Network/Capitation option, where you have to make use of a specific service providers like CareCross, Prime Cure, Medi Cross, Keycare etc.
When it comes to chronic medication, first make sure it is covered on the option you want to join. Make 100% sure your condition is regarded as a chronic condition and then that the medication you use is also covered. Most people join an option because it covers their condition, but when it comes to the medication, the provider says it is not on their formulary and is not covered. They will then request you to use an alternative. If that is not possible, they will pay you the rand amount for the alternative and you will be liable for the difference in cost.
Oncology, Dialysis and HIV
You also have to make sure how the provider and your choice of option cover Oncology, Dialysis and HIV. Most medical aids have specific benefit programmes for these conditions, which offer good cover, but it is important to make sure exactly what that cover is.
Different options from which to choose:
Traditional Plans (Comprehensive)
These plans cover almost all medical expenses (subject to the rules of the individual medical aid) and include benefits for in-hospital and day-to-day expenses (subject to the rules of the medical aid).
Hospital Plans and Hospital with Savings
These cover accounts submitted by service providers for treatment only while you are in hospital. You are responsible for your own day-to-day medical expenses. These plans cost less than comprehensive medical aid plans and are offered by every medical aid provider.
What is a medical savings account?
The medical savings plan is designed to cover day-to-day expenses. The consumer contributes a fixed monthly amount to a savings account. The total annual amount available in the savings account is available, in advance, for medical expenses in that year. In terms of the medical aid regulations, the amount may not exceed 25% of a consumer’s annual premium. Once the benefit has been used up, the consumer is responsible for the day-to-day expenses. Any credit balance in the savings account at the end of the year is carried over to the next year.
What is a Capitation Plan (Network Option)?
These plans provide individuals with basic day-to-day cover at affordable rates, at specific network providers. Network providers differ from one medical aid to the next and members have to use designated service providers.
Please note that some of the medical aids have income categories. This means that what you pay every month for the plan is dependent on what you earn.
If I am already a medical aid member, when should I consider changing options or medical aids?
In a rapidly changing environment, ongoing evaluation of your medical aid has become vital to ensure optimum benefits are available and that you are covered for foreseen and unforeseen medical conditions and emergencies.
Review your own personal needs and basic requirements
Are you still single or have you got married? Do you have children? Have you been diagnosed with a new chronic condition?
Do penalties generally apply if I leave a medical aid or switch?
Most medical aids require written notice of between one and three months of your intention to resign from the medical aid. Changing options within your current medical aid can be done only towards the end of the year, for commencement on 1 January. Providers have their own rules with regard to changing options during the year.
There are two kinds of waiting periods, namely:
- A general waiting period of up to three months
- A condition-specific waiting period of up to 12 months
Waiting periods do not apply to:
- Prescribed minimum benefits (PMBs) other than specified
- A child dependent born during the period of membership
- A member moving between benefit options, unless he/she has to complete the remaining period of previously imposed waiting periods
- When an individual has to involuntarily transfer to another medical aid due to a change of employment
- In instances where an employer changes the medical aid of his/her employees, with effect from the beginning of the financial year
Glossary of Medical Aid related terms Read More
If you have any questions please complete the contact form with your details and we will call you.
Should you need advice on financial products other than medical aid, remember that SA Medical Aid is a division of SA Financial Planners. You can visit our website for more information and to contact us with your specific needs for short-term insurance, life insurance, investment planning, retirement planning, and savings options.