A new year, a new medical aid

Getting a hospital bed in a decent facility can depend on your ability to pay for medical services. (Photo: Michael Bulhozer/Reuters)

Getting a hospital bed in a decent facility can depend on your ability to pay for medical services. (Photo: Michael Bulhozer/Reuters)

Everybody hates paying for car insurance just in case they have an accident, or paying household insurance for when a burst geyser floods the house on a Saturday morning.

But one grudge purchase we resent even more is medical aid. 

Cash drains out of your bank account every month, yet six months later your doctor, dentist or pharmacist asks for your credit card because your medical funds have already expired.

If you work for a big company at least your employer contributes to your health scheme, but the self employed or unemployed really feel the pinch.

Yet for all we moan, we rarely bother to check whether we are still on the most suitable plan for our needs, whether we have insufficient or too much cover, or if we could save money by switching to another plan or by picking a different provider.

Now is the time to do so, because medical aids only allow you to change the option you are on during December. 

Leaving one medical group to join another can be done at any time, but switching plans within the same scheme can only be done at the end of the year. “It may seem like a silly rule, but schemes have put these measures in place for good reason,” says the website medicalaids.net. Some members were capitalising on the benefits of more expensive plans then changing down again mid-year to reduce their contributions. 

Deciding whether to save money by switching to a cheaper plan with fewer benefits, or going for a more comprehensive plan with better protection can be complicated, but here are some guidelines to help you know what to look for.

Firstly, don’t simply compare what you are paying now to what you will have to pay next year and decide to downgrade to a cheaper plan or cancel your cover completely if money is tight. The main thing to remember is that without medical aid, you can literally be made bankrupt by ill health. (See The crippling cost of falling ill on p2.)

Peter Jordan, the principal officer for Fedhealth, says making decisions on price rather than need can be dangerous and detrimental to your wellbeing.

Choose an option that covers your risks comprehensively based on what you can afford, he says. 

Several issues should influence your choice. 

If you are on a hospital plan only, look at whether the chronic care and medication the package also offers are sufficient. If you develop kidney disease and need dialysis, you may be forced to have treatment at a cheaper state hospital, not the private hospital you would prefer if the chronic benefits are low.

Other potential lifestyle changes that should influence your choice include the onset of any age-related illness, the need for an operation you have been delaying, or being diagnosed with a chronic condition.

“It also makes sense to upgrade from a hospital plan to comprehensive cover if you intend to start a family soon, if you are in a risk group for dread disease and even more so if you have comorbidities (diabetes, obesity, and hypertension) as these up your risk for heart attack and stroke,” says Jordan.

If you are in good health and have no dependents on your medical aid, a hospital plan may be all you need. “Be realistic about the state of your health—— but don’t bank on the invincibility of youth or the longevity of your current state of good health,” says Jordan.

Also be aware that when a scheme promises to pay 100% of hospital rates, it means it will pay 100% of what its own set fee for that service is. If a specialist charges a higher rate than the medical aid’s tariff, you will be billed for the shortfall. You can avoid that with a plan that pays 200% or even 300% of specialists’ rates. But if you’ve never needed a hospital, are in the prime of life and not accident-prone, paying a premium for that extra cover is probably unnecessary.

Read the exclusions and limits of any plan and check what the scheme’s network of doctors and clinics means for you in real terms. Belonging to a medical aid group with its own network of service providers shouldn’t mean you can’t access the best specialist care that may be linked to another scheme. Nor does the fact that a clinic is in an affluent area mean it has better medical expertise than clinics elsewhere.

If you have shocking eyesight and/or poor teeth, look for a plan with generous optometry and dental limits.

It’s wise to join a medical scheme when you are young, fit and healthy, because by the time you really need it, medical aid schemes don’t actually want you as a member. Thankfully they cannot exclude people whom they see as a liability, but a late joiner penalty is applied if you join for the first time after the age of 35. That is designed to encourage people to join earlier in life to ensure the schemes are sustainable, as the fees of young and healthy members subsidise the elderly.

If you want to switch from one medical aid company to another, make sure you do it without a break in coverage. While medical schemes cannot refuse to cover any pre-existing conditions, they can impose a waiting period of up to a year on all claims related to a specific condition. 

“Current legislation hinges on whether you have had more than a 90-day break in cover between your previous scheme and the scheme you are now applying to join,” says Jordan. If you have had a long break, your new scheme can apply a three-month waiting period as well arefusing to cover the treatment of any pre-existing conditions for up to a year.

It’s also not wise to join one scheme then try to change within two years. Once you have had two years of continuous cover, a new scheme can only apply a three-month general waiting period. But if you move after less than two years, the new scheme can exclude cover on pre-existing conditions for up to a year.

Many people resent paying these monthly contributions, but medical aid is a necessity, not a luxury, in a country where the state is struggling to provide healthcare for all, Jordan says. 

“It is not necessary to over-insure, but it is also not wise to under-insure if you can possibly avoid it. Medical costs keep rising and life has a funny way of catching you by surprise. Even if you are young and healthy, accidents or unexpected illness can happen and you don’t want to be caught unprotected,” he says.

“The heart of the matter is that members need to do their homework carefully when either joining a scheme or selecting a new option.” 

Since the medical aid schemes themselves suggest that you discuss the most appropriate package with an independent financial advisor, that’s probably the “healthiest” idea.