Choosing a medical aid option and understanding benefits

You don’t have to remain on the same medical aid plan year after year – in fact, it is considered good practice to consider your options during the “open” period between September and December.

During this time, you can review your and your family’s requirements for healthcare and opt to either upgrade or downgrade your plan. Open medical schemes have myriad options with varying level of benefits that are broken up into hospitalisation benefits, out-of-hospital benefits and chronic benefits with all having prescribed minimum benefits (PMBs) for access to minimum health services.

Medical aid members find their benefits and how best to use them difficult to understand, as it may feel simpler to remain on the same plan, resulting in a missed opportunity to change plans. Terminology can be confusing and trying to compare options and schemes can be virtually impossible. You are allowed to change your selected option once a year, usually in January. Knowing more about what benefits are provided in the plans provided by schemes could help you make an informed choice about which option is most appropriate.

What are my medical plan options?

Open medical schemes have various options for members to choose from. They vary based on the level of contributions being charged and the level and types of benefits they provide. Contributions may vary according to family size and make-up, as well as income. It is important to know if your option requires you to use certain providers, as using a doctor or provider outside the network could mean that you may have to pay in for the bill.

Understanding hospitalisation cover

Most medical schemes in the market have options that require you to use specific hospitals for planned treatment. This cover may pay at certain rates or have an overall limit. It is important for you to choose the option that has a hospital that is close to you in the case of planned procedures. Ask the scheme or adviser for the list of hospitals in a network – this is an important piece of information that can assist you in choosing an option.

The types of options range from hospital plans that provides cover for hospitalisation and limited chronic benefits to network, new-generation and traditional plans that provide for hospitalisation, chronic benefits and out-of-hospital benefits through a savings plan or a scheme benefit.

Know what you are covered for out-of-hospital

Some options cover day-to-day benefits (such as GP visits, optical benefits, or medication) using a savings account, or in some cases a set scheme benefit. Always ensure that you are aware of what benefits and amounts are available to you, as well as the rate being charged – failure to do this may result in a co-payment where you may have to pay up front from your own pocket.

Hospital plans do not cater for out-of-hospital benefits except for chronic conditions where the scheme has a set basket of care that a member can access. These are usually required to manage a chronic condition and require a member to be registered as a chronic member. These benefits typically include pathology, medicines and consultations with a doctor.

What is the scheme rate?

Many members believe that their medical scheme will cover the full cost of what the doctor charges. They are often shocked to find out that this is not the case. Providers are allowed to charge at different rates, but the scheme option that you are on will pay only at a specified rate.

Beware of misunderstanding the often-used ‘100% of scheme, medical aid tariff or rate’. This does not mean that your healthcare provider will be paid in full, as they may charge substantially more than this scheme rate. In order to avoid the risk of your claims not being paid in full, it is always important to identify your network provider in the option you have chosen and seek the healthcare you need from those providers. If you can negotiate with your doctor to ensure that they are on the network or charging at the scheme rate, you may be able to avoid any nasty surprises when the scheme has to pay for the services you have been provided with.

Other things to consider

An important factor to always take into account when choosing an option is the life stage that you are in. Different life stages are based on age, family size, health needs and employment status. Affordability of the option is always a factor to consider as family dynamics change.

The different life stages may influence the choice of option as follows:

• Young and single: Young adults are generally considered healthy, active and single relative to older members. For these members who are beginning new careers, an important decision would be the choice of a medical aid option. The benefits that these members generally look for in an option is one that would cover hospitalisation due to an accident or sudden illness. The options that these members commonly consider are a basic hospital plan or a network plan that offers limited day-to-day cover in a network setting.
• Family with children: In the case of newly married couples looking to start having a family, they would consider the needs of the growing family. The option that they would consider is one that includes generous maternity benefits, including visits to a paediatrician after a baby is born. For a growing young family, the options that could be considered are network or new-generation plans that have adequate day-to-day cover, including cover for maternity benefits and limited chronic benefits.
• Midlife or middle aged: For families with growing children, the options that they may want to look at may include benefits for orthodontics and emergency room visits for accidents. They would consider a new-generation or traditional plan with higher day-to-day cover from savings and risk, including additional chronic benefits.
• Retired or retiring: A person’s needs change as they retire, as their income is based on a pension and not a salary. A retiree’s choice of option should have sufficient funds to cover any health or medical event. A new-generation or traditional option with sufficient day-to-day cover and hospital cover, higher chronic benefits and cover for joint replacement and other age-related conditions would be considered when choosing a plan at this life stage.

Seek the advice of a healthcare intermediary when choosing a medical scheme option. This advice is often paid for by the scheme itself and it therefore makes sense to use their services.

Health cover is an increasingly important product that provides you with the comfort that your healthcare needs are met. As membership of a medical scheme increases every year, it is essential that your choice of option is the best one for you based on your needs and life stage. This is the time of the year where a review of your plan will ensure that your healthcare needs are met for the upcoming year.

Paresh Prema, Health Branch Head – Technical and Actuarial Consulting Solutions at Alexforbes.