Specialists have compiled a survey of the medical schemes they would recommend. The results: Camaf, Fedhealth, Liberty and Profmed.
They judged these according to the level of interference with the doctor-patient relationship, balanced billing, efficiency with accounting and pre-authorisation, co-payments, rate fixing, reversals and formularies.
But how do these medical schemes stack up for members?
For comparison, we have added Discovery Health, which is the largest medical scheme in South Africa with two million lives covered, and which has got up the noses of specialists for introducing a closed doctors’ network that sets rates for specialists and general practitioners (GPs).
We have excluded Camaf, which is available only to people working for a chartered accounting firm and, quite frankly, is very expensive.
We have based the comparison on the profile of a healthy family of four, who wants maximum hospital cover, but do not need high levels of day-to-day cover. With the tax benefits having been decreased and a family of four receiving a tax break only on the first R1 700 of the monthly premium to a medical scheme, self-funding a larger percentage of doctor visits and pharmacy purchases makes sense. We looked for cover that was reasonably affordable: below R3 000.
For this reason we compare, alphabetically, Discovery Classic Saver, Fedhealth Maxima Standard, Liberty Platinum Plus and Profmed ProSecure. It is important to note that Profmed is available only to professionals with a four-year degree.
What you need to know
Medical aid rates: Each medical scheme has its own “medical aid” rate (for example: Discovery Health rate or Profmed tariff) which is based on the National Reference Price List (NRPL) recommended by government. Normally these are around 5% to 6% higher than the NRPL and are the basic reimbursement rate. Some plans pay two or three times this (200% or 300%) if your doctor charges more. Fedhealth’s basic remuneration rate is the NRPL and the Fedhealth rate is 300% of NRPL.
Negotiated tariffs: The medical schemes have negotiated their own rates with the hospitals, which means your hospital bill should be covered. The payment to doctors might not be covered if they charge higher than the rate offered on the plan.
Chronic medication: Each medical scheme provides a list of chronic conditions it covers and it is paid from the risk cover, not savings, but is subject to a maximum.
Preventative measures: Some medical schemes such as Liberty pay for preventative screening, such as cholesterol, from the risk cover and not from the savings account.
The conclusion is that a lot depends on what you need from your medical scheme, although Fedhealth seems to come out on top for both hospital and day-to-day expenses and provides a safety net.
The best hospital cover: Liberty Platinum Plus pays doctors in hospital at 300% of the Liberty Health Rate, but it does come with much lower day-to-day savings. Fedhealth pays 300% of the NPRL and has a higher savings pool.
High savings account for day-to-day expenses: Profmed or Fedhealth but Profmed pays the medical scheme rates for in-hospital GPs and specialists.
A bit of both: Discovery Classic Saver falls somewhere in between with good savings cover and payment to doctors at 200% of the Discovery rate, which is higher than Profmed, but lower than Liberty Plus and Fedhealth.
High chronic cover: Profmed or Liberty Platinum Plus offer high chronic maximums, but not all medical schemes cover the same conditions, so you need to check that your plan covers your condition.
Benefits are not the only thing you need to consider. If you ever need urgent medical assistance, you will want to know that your medical scheme will pay.
Butsi Tladi, head of healthcare at Lekana Employee Benefit Solutions, says you need to consider the financial stability and sustainability as measured by solvency, increases, operating results and demographic profile. The fund should have a sound risk management philosophy, including hospital authorisation, disease management, medicine formulary and treatment protocols. An efficient and effective administration — such as settling claims, billings and turnaround times, as well as strong governance led by a competent board of trustees — is essential.
“The question is whether their practices are sustainable over the long term.” While it might be annoying to have a medical scheme that asks 101 questions before hospital admission, it means it is managing its risks properly and is less likely to go insolvent, but this has to be balanced by a fund that pays out when you need it.
For example, Tladi says, although most medical schemes say they cover back surgery, it is something they will not authorise easily unless it can be proved that other less aggressive treatments have been tried.
Size can matter. A well-managed large scheme is at less risk from insolvency because individual claims have a far lower impact. Discovery has 808 000 members, R4-billion in reserves and an AA rating from the Global Credit Rating agency. But Discovery does not meet required solvency. Fedsure has 76 000 members, a 25% solvency ratio, with R400 million in reserves and an AA-rating. Profmed has 23 800 members, R350-million in reserves, which equates to a solvency ratio of 58%. They are still awaiting their GCR rating. Liberty Health has an A+ rating and 45 000 members. They are working towards reaching their 25% solvency ratio. They were unable to provide the rand value of their reserve fund at the time of going to press.