A significant number of South Africans are on a medical scheme but very few of us really understand the products we are paying for and how they really work. Research from Health Bridge, a company dedicated to transforming the healthcare market, found that medical savings start running out by May, and by December about 60% of claims are not covered by medical aids.
Looking at the number of uncovered claims and reviewing a couple of medical aid plans, our team concluded that most policy holders do not really know the scope of their medical aid coverage. Hence we wrote this article to shed light on some of the different types of medical aids available and laid out tips on how to choose a medical aid that will best suit your needs.
5 Types of Medical Aid Cover Plans Available in South Africa
1. Traditional Plans
These cover In-Hospital costs as well as Out-of-Hospital Day-to-Day medical expenses. The benefits of these plans are not uniform across all medical schemes, hence you will have to carefully check available benefits in each medical scheme. There are usually limits on benefits you can claim in a given year, policy holders are to carefully check and know their claim limits.
Traditional plans are generally expensive and offer generous sub limits and members have no incentive to act prudently and manage their expenses. The approach is that one of “use it or lose it”.
2. Comprehensive Plans
These also cover In-Hospital costs as well as Day-to-Day medical expenses. Their difference from traditional plans is that their Day-to-Day medical expenses cover is provided in the Medical Savings Account. Once you have exhausted the Medical Savings Account there is an element of cover provided by the Medical Scheme in the form of an Above Threshold Benefit subject to certain limitations and sub limits.
Comprehensive plans are fairly pricey and are more ideal for members who want a comprehensive In-Hospital cover and have large cumulative Day-to-Day medical expenses.
3. Hospital plans with limited Day-to-Day medical expenses
These cover In-Hospital costs and the Day-to-Day medical expenses are covered through the Medical Savings Account. Product may vary according to the percentage allocated in a Medical Savings Account. According to the Medical Schemes Act, a maximum of 25% of your total month contribution can be allocated to your Medical Savings Account.
This is actually the popular plan among most South Africans. It seems most South African like how the Medical Savings Account concept works, the plan provides an annualised credit facility of funds so that members can manage their yearly Day-to-Day medical bills. The principle of the Medical Saving Account is “what you do not use – you do not lose”. At the end of the year, positive balances are carried forward to the following year.
4. Hospital Plans
These only cover In-Hospital expenses, members are expected to manage their out-of hospital daily healthcare needs from their own pockets. Hospital plans are also popular in the South African healthcare market because most people are more concerned about In-Hospital expenses rather than Day-to-Day medical expenses. Their affordability also makes them popular.
5. Network Plans
Network plans cover the basic primary healthcare In and Out-of-Hospital Day-to-Day medical needs. Members are restricted to a network of hospitals for their In-Hospital benefits, the Day-to-Day healthcare needs are restricted to the Designated Service Providers (DSP). Network plans are designed for the lower income clients , the idea is to atleast give members access to private hospitals and basic day-to-day healthcare cover.
After determining the medical aid plan you need, you will still be left with a mandate to select your ideal option. This can be a hassle as there are a lot of options to choose from, however, consider the following tips before taking up a policy.
Auditing your previous year healthcare expenditure
If you have been under a medical aid cover for the previous year, you will have to ask yourself questions like: Did I run out of my medical savings funds? If No, then you might consider downgrading or staying in your current plan. Remember, if you downgrade, your savings balance will be carried forward to the current year and you will have some funds to cover you for day-to-day healthcare needs as they arise.
Those new to medical aid cover might have to calculate how much you spent on your healthcare needs before joining any medical aid cover, and determine a befitting option that can cover your healthcare needs using your last year calculations as a benchmark
Would you consider a hospital network?
Medical schemes can give you an option of using their hospital network so as to get good rates and professional service. If you don’t mind using these hospital networks then your monthly premium might be a bit lower. However, if you have your own preferred hospitals then you might have to be prepared for a higher monthly premium that will cater for your choices.
Which hospital plan do you need?
Depending on your health status, like most South Africans you might be more worried about In-Hospital cover and it might be all that matters to you. In that case you might consider choosing an option that will give you comprehensive hospital cover and let you manage your daily healthcare needs, provided your health and lifestyle do not usually require more daily health assistance.
In a case where you have a medical condition that needs Day-to-Day medical assistance, then you might look for a plan that covers your specific daily healthcare needs.
In case you were planning to visit a specialist for certain medical assistance, you should put that in mind as you shop around for a befitting option. Make sure your chosen option will cover for your planned medical procedures.
Medical aid cover and insurance are the same, if you choose a cover that you hardly afford you will have problems with your insurance provider when you claim. Before signing up for a policy, review your budget to determine affordability.
You should be able to come up with a probability of how frequently you are likely to claim from your medical scheme. Frequent users should invest in a scheme that offers the most cover within the family budget.
With medical insurance, you must not be sold out by merely comparing monthly premiums without taking into account other costs. Even if a plan has low premiums, its copayments might be unbearable hence you have to take note of costs not prominently featured in the plan.
Most medical schemes offer wellness programmes, in which policyholders who remain healthy and stay long without claims are rewarded. This is a monetary reward which can compensate the cost of medical health premiums.
There are professional medical aid specialists who are not biased to any medical scheme who can help you choose an ideal policy that best fits your income, budget, health needs and lifestyle.
Picking a medical aid policy is not easy, it requires that you do a proper research before being sold into a policy. Seek professional help and consider your healthcare needs as the basis, but, the most important thing is that you are supposed to be covered at the end of the day. Hospital expenses and debts can be traumatic and hard to recover from, you will always need a medical cover to stay safe.