It’s now time to review your medical aid scheme cover for 2019. This means you have a window within which you can switch to a different plan for the new year. This window usually closes at the beginning of December (depending on your current provider), so don’t delay collecting the necessary information. This is not a decision to be rushed.
Why do I have to decide now?
Medical aid providers allow you to switch plans once a year (at the end of the year) without penalties or consequences. If you want to save on premiums or you need to increase benefits, now is the time to do it.
What if I want to change providers altogether?
If you are unhappy with your medical aid provider, you can switch to another at any time of the year. But before you do, consider the following:
Waiting Periods
Medical Aids by law must accept anyone who applies to join their scheme. To protect themselves from older or sickly members that join without having contributed to the risk pool, they usually impose a waiting period of between 3 and 12 months.
Waiting periods will apply if 1) you have not been a member of another South African medical aid for the past three months or more, 2) if you change medical schemes before 2 years of being covered with your previous medical aid provider and 3) if you have a pre-existing medical condition.
Finding out about any waiting periods is extremely important before deciding to change providers.
Late joiner penalty
As an additional means to manage the risk of older or sickly members joining without having contributed to the risk pool, medical schemes (according to the Medical Schemes Act) are entitles to add a late joiner penalty to your premium if you were not part of a medical scheme before 01 April 2001. The late joiner penalty is calculated (using a prescribed formula) based on the number of years that you were not on a registered South African medical scheme. The late joiner fee can range between 5% and 75% of the total contribution, depending on the number of years that you were not covered by a medical scheme.
How do you know that you are in the right medical scheme?
Understanding how your medical benefits work is a daunting task for most. For example, your scheme might cover you for 100% of hospital costs at the medical fund rate. You might think that this means all in-hospital costs will be covered. Unfortunately, many uninformed South Africans are left with an enormous hospital bill for making use of a specialist that charges more than the medical fund rate. This is just one example of what could be overlooked when selecting the right benefits for yourself and your family.
Here are a few tips to follow and questions to ask when reviewing your current or future medical plan:
Do you understand the various benefits and their associated costs?
Before you make any decisions, you need to familiarise yourself with certain medical terms and jargon. Understanding these terms could save you money. You may be paying for something you don’t need, or perhaps you aren’t properly covered for something you do need. Now is the time to find out.
Here are the “Top 5” terms you should understand before reviewing your medical aid for 2019:
Exclusions
This is very important as it tells you exactly what is not covered. Be aware that this can change from year to year. Just because something was covered in 2018, does not mean it is automatically covered in 2019. Make sure to check this to avoid any nasty surprises when you try to claim.
Co-payments
Most medical schemes apply co-payments that you need to fork out before undergoing certain procedures. These are different depending on the scheme and plan you select and are also subject to change. Co-payments can apply for in- and out- of hospital procedures. Check this detail in your medical plan brochure, especially if you have identified any upcoming medical events for 2019.
Prescribed Minimum Benefits (PMB’s) and chronic medication
In terms of the Medical Schemes Act, regardless of the benefit option, you have selected, there is a defined list of benefits/treatments for which all Medical Aid schemes in South Africa have to provide cover for. This includes covering the costs related to the diagnosis, treatment and care of an emergency medical condition; a limited set of 270 medical conditions; and 25 chronic conditions.
Important to note when it comes to chronic medication, is that schemes can impose preferred providers and sometimes only pay for generic versions of medication. This essentially means that you need to get your medication from the medical scheme’s appointed service provider or you will need to fund a co-payment out of your own pocket for your chronic medication.
If you have a persistent condition, check if it is listed as a chronic condition and then check that the medication you use is also covered. Some medical schemes have additional chronic conditions that they cover over and above the 25 that they are obligated by law to cover. These additional conditions could change, so again if you were covered this year, don’t assume it will be covered in 2019. Rather do a double check to avoid surprise expenses.
Preferred provider networks
Most Medical Schemes have service provider networks with whom they have negotiated rates to contain costs. These networks include pharmacies, GP’s, specialists and hospitals. If your healthcare provider is not one of these network providers, you will be liable for a co-payment.
Coverage
Coverage can vary dramatically from one scheme to the next. It can also change from year to year. These changes are usually announced with the annual price increases. Most schemes pay claims, at between 100%-300% of their own Medical Scheme Rate. There are two things you need to do here; 1) find out if your doctor charges Medical Scheme Rates and 2) negotiate rates with specialists prior to treatment. If they charge above Medical Scheme Rate, and the procedure was not considered by your scheme to be an emergency, you may be liable for the difference in costs between what the specialist charges and what your medical scheme has agreed to cover. Of course, if you have taken out gap cover, any of these in-hospital expense shortfalls will be covered.
What does 2019 look like?
Do you have a medical condition now that you anticipate will drain you financially? Or are you anticipating a medical event like childbirth or dental treatment? Maybe you’ve been putting off a knee replacement or other surgery, but it can’t go unattended any longer. If this is the case, you should consider upgrading your plan and should at very least be adding gap cover, which will cover any payment gaps between what your medical aid pays out and what specialists charge you while in hospital.
Could a doctor network benefit you?
Most medical aids have their own network of doctors and hospitals. If the network is convenient for you to use, then changing to a ‘network’ plan could mean substantial discounts on your monthly medical aid premium. If saving money is a major priority for you, then find out if the medical scheme provider you are currently with has a network and if they are in your area, then if they are acceptable to you, consider downgrading your option.
How long did your savings account last this year?
Did you run out of savings halfway through the year? Or maybe you have a surplus left over. You need to calculate how much you spent on out of hospital and day to day medical expenses in 2018. This way you will know if you should be seeking a plan with a bigger savings portion. If you have a surplus, this will carry over to next year, which may allow you an opportunity to downgrade to a plan with a smaller savings portion. This is most probably the most time-consuming part of reviewing your medical options for next year. You will need to look at all your slips and bank statements to calculate how much you need for unforeseen/seasonal illness. You may find your major costs are during the winter months. Knowing this upfront will allow you to plan better and perhaps put aside additional money into secondary savings account so that you have funds available when your medical savings account runs dry.
How much is your medical aid increasing premiums by?
Unfortunately, medical aid premium increases are usually above inflation and in many instances more than annual salary increase rates. This means that your medical aid contribution is one of your biggest expenses, right up there with home loan repayments/rent and vehicle repayments. Whether or not you can still afford your current plan is a major factor in your decision for 2019. This alone may force you to downgrade. Before you do, carefully consider the loss of benefits and the risk you are taking. You may find there are other items in your budget you should rather be cutting out, especially if you have identified future medical events in 2019.