/ 26 October 2012

Making healthy medical aid choices

Andrew Edwards
Andrew Edwards

The majority of citizens depend on State clinics and hospitals for their "means tested" healthcare services while the well-to-do enjoy world class treatment at a network of private- general practitioners, medical specialists and providers. Healthcare is a "big number" game. In the latest calendar year private medical schemes members contri-buted R107.4-billion towards medical schemes and medical -savings accounts. Your medical aid — on average — costs R1063.90 per family member per month.

There are more than 3.7-million principal members in the private medical schemes universe. If all beneficiaries are counted, overall 16% of the population benefits from some level of private healthcare cover. The most important private health-care funding decision you make is which of the country's 26 open medical schemes best suit your needs. This decision can be made at any time of the year and is typically based on affordability.


South Africa's private medical schemes work on a system of cross-subsidisation. Each scheme pools the monthly premium contributions of all of its members to assist those who become ill, with young and healthy members subsidising the elderly and sick.

Why should you consider joining a medical scheme? In an environment where the public healthcare system is under increasing pressure to provide services for those who cannot afford it, some form of medical cover is essential.

"Medical aid is probably the most important safety net you can buy for yourself and your family," says Board of Healthcare Funders (BHF) spokesperson Heidi Kruger.

Andrew Edwards, executive princi-pal officer of Liberty Medical Scheme, says that medical schemes protect you and your family financially in the event you have to pay large, unexpected medical costs. Your scheme can give you access to some of the best doctors, hospitals and life-saving procedures in the world. In also pays for many healthcare needs such as nursing, surgery, dental work, medicine, physiotherapy and eye-care.

The arguments most commonly presented by those who can afford medical cover but refuse it are easily dismissed…

'I am too young and healthy to join a medical scheme'

"Many people do not take out medical cover when they are young because they are healthy and feel they do not need it," says TopMed Medical Scheme principal officer Barbara Duffy.

"But the longer you delay the higher your premiums will be, especially- if late joiner penalties are imposed on your monthly -premiums." Medical schemes are structured in such a way that younger and healthier members enter the system to balance the books.

By not joining today you create an affordability nightmare when you try to join later.

'I can afford to pay my own medical expenses'

"Younger, healthier individuals could pay for the occasional doctor visit and medicine out of pocket, but what if they need specialist or long-term medical attention because of an unexpected illness or a tragic accident," says Edwards.

'Medical schemes premiums are too costly'

"Although medical scheme contributions are seen to be high, it is important to note that members are paying for quality," says Edwards. Liberty tries to address affordability concerns by carefully shaping the benefit options it makes available to its members.

There are 26 open medical schemes to choose from — with 161 registered benefit options across those schemes — from which you should be able to meet your exact needs. "An important first step is to review the alternative solutions in the marketplace," says Duffy. "Always make sure that when comparing premiums you compare like with like."

She suggests you consider the following when making medical scheme choices: • What can you afford to pay each month in contributions?

• What are your (and your family's) healthcare needs? Does anyone in the family have a chronic illness that requires medication? And does your preferred medical scheme (and selected option within the scheme) adequately cover that condition?

• At what tariff rate does you -preferred medical scheme/option pay out at? Often, the tariff rate -varies according to options within a scheme.

• Your preferred scheme may have a network of GPs, specialists and hospitals that they will expect you to. You should consider which healthcare providers in your area belong to the network.

• Some medical schemes offer savings accounts. If you join such a scheme then as much as 25% of your monthly premium is ring-fenced for your medical expenses and generally applied to day-to-day healthcare expenditure. Another important decision is which of your chosen scheme's -benefit options best match your family's needs. New members choose a benefit option when they join a scheme, but there is a small window of opportunity for existing scheme members to change from one option within their medical scheme to another.

Discovery Health allows its -members to change benefit options to any option of their choice once a year (at year end) per the Medical Schemes Act. This change is free of any underwriting, meaning you can do so without any additional waiting periods or penalties.

Choosing benefit options

"Members should speak to their financial advisor regarding what benefit option is most appropriate for them in terms of the benefits that they require as well as what they can afford," says Discovery. This suggestion holds whether you are joining a medical scheme for the first time, shifting from one scheme to another, or simply considering benefit options within a scheme.

You should choose carefully because industry statistics suggest that once you decide on a benefit option, you stick with that choice. Discovery Health Medical Schemes says that over the past three years the majority of its members (more than 93%) remain on the same bene-fit options. Roughly half of those who change benefit options choose to downgrade.

"Good medical schemes will revise and review their benefit options every year to ensure that the benefits are appealing to members, are appropriately priced and affordable," says Edwards. Being on the correct option within your medical scheme is essential, he says.