Consulting Manager at Alexander Forbes Health, Kerry Vermeulen, explains why it is important that you make an informed decision when selecting a medical scheme and the specific option.

While you are able to join a scheme any time during the year, or move from one scheme to another, changes to another option within a scheme can often only be done in January. Therefore towards the end of each year it is worthwhile evaluating if your medical aid plan still meets your needs.

Choosing the right scheme

When considering what medical scheme to join, one should not base their decision solely on the premium being paid. It is important to ask your healthcare broker about the sustainability of the medical scheme that you are choosing, ask questions about the membership growth, administration, solvency and past average annual increases of the medical scheme. You do not want to make the mistake of joining a ‘cheap’ medical scheme that is not sustainable in the long term.

Medical schemes afford you the opportunity to change your option on an annual basis. Your family has unique and changing healthcare needs and it makes sense to review your plan every year based on these needs. It is important that you understand how your healthcare requirements are covered on the plan you choose. This can be an overwhelming task and your broker can assist you with your decision.

A specialist healthcare broker will conduct a Financial Needs Analysis, taking into account your medical history as well as your anticipated need for hospitalisation, chronic medication requirements, day-to-day cover as well as affordability of the plan. This will help you identify an appropriate scheme.

Schemes had options which were either ‘traditional’ or ‘new generation’ options. Typically, a traditional option is one that sets out the benefit limits for you per category, i.e. optical, dentistry or specialist visits. The new generation options are those that have a medical savings account designed to help you manage your day-to-day cover through the year.

According to legislation, your medical savings account cannot be more than 25% of your monthly premium. Your option that you choose will have a defined savings percentage, but not be more than the 25%. Find out what your benefit limits are and what your annual savings account will be on the new generation options.

The medical savings account is up fronted to you on 1 January of every year or if you join during the year, pro-rated for the medical scheme calendar year (which runs from January to December). Once your savings account has been utilised by you during the year, you have to fund your own day-to-day expenses from your own pocket. Some options within schemes have additional ‘threshold’ cover for members who feel that the savings allocation is not sufficient for their day-to-day needs. Unused savings for the year will roll over to the following year.

Additional cover

Medical schemes offer high cover options for those that require extensive healthcare. These options are expensive but necessary for those requiring additional day to day benefits, oncology, dentistry and chronic medication and cover additional benefits, higher limits, and can have higher medical savings accounts than the lower options.

Medical schemes also offer low cover/network options which are typically either just a hospital plan with no medical savings accounts and cover events in-hospital only as well as chronic medication. You would need to fund your own day to day benefits on these hospital plans. A network option stipulates which providers you need to use (e.g. a network of hospitals and networks of doctors, dentists, optometrists etc.). These options are cheaper as the medical schemes have negotiated discounted rates with these network providers. Some of these low cover/network options charge a premium based on your monthly earnings; therefore they could benefit lower income earners as they would pay a lower premium yet still obtain sufficient benefits.

Provided that members within these network options used the correct network of providers and understood how their option worked, they were satisfied with the level of cover provided to them based on the premium they are paying.

Review your option with your broker annually and decide whether you are under or over insured on your healthcare option based on your individual circumstances.

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