It is again the time of year when you need to consider your cover for health care.
Perhaps you need to choose a medical scheme to join for 2013, or you have found your scheme’s benefits inadequate during the past year and want to reassess your cover.
Each year at about this time, medical schemes announce their contribution increases and their benefit changes for the year ahead. These changes are a good reason to review your cover and what you are paying for it.
Even if your cover was adequate, you should evaluate how effective your scheme was and compare that with other options that could have been more cost-effective, independent financial adviser Wynand Venter, of Wynsam Wealth, says.
Also, your scheme may have introduced cost-saving measures, and if you are not aware of them, you may miss out on these savings or may incur costs by, for example, not using the correct provider.
Venter says there have been quite a few changes to schemes’ chronic medicine formularies (lists of medicines for which the scheme will pay) that will require members to change their medication if they want to avoid paying part of the cost of the medicine themselves.
You need to be aware of what your scheme is offering, as well as your own needs.
If you find it too confusing, are too busy to do the research or can’t be bothered to do it, it is a good idea to use a properly qualified healthcare broker.
Venter says even if you are capable of doing your own research, good healthcare brokers have a wealth of experience and can point out pitfalls you are not aware of.
A good broker should be able to translate difficult term inology for you and to explain how the scheme’s benefits work in simple and understandable terms.
The broker should do a thorough analysis of your past, present and, as far as possible, future healthcare needs, to fully understand what you require, and can then give you a view on whether a particular scheme or option will suit you.
Victor Crouser, the head of the coastal division of Alexander Forbes Health, says a good healthcare broker should contact you towards the end of each year about your scheme’s changes for the following year, and not rely on the scheme to communicate with you.
He says you may also need to review your medical scheme cover after a life-changing event, such as the birth of child.
He says an independent broker should be able to offer you a selection of at least three schemes.
Members often fail to claim from a medical scheme when they could, because they don’t understand the terms a scheme uses, Crouser says. A good broker should help you to understand exactly what you can and can’t claim for, he says.
Scheme call centre staff may have limited experience in the health field, Crouser says.
“With every good intention in the world, they might not have a full understanding of what the scheme is legally obliged to pay for. A good healthcare broker will know the Medical Schemes Act, as well as the processes and procedures followed within the medical scheme and will thus be in a position to ensure that your claim queries are handled efficiently and effectively,” he says.
This is particularly relevant, Crouser says, when it comes to claims for prescribed minimum benefits (PMBs), because claims for these conditions are sometimes incorrectly handled by schemes, which may result in you paying for something the scheme is legally obliged to pay for. PMBs cover all medical emergencies, almost 300 life-threatening conditions and 25 common chronic conditions.
A good broker should regularly guide you on obtaining the best value from your chosen medical scheme, Crouser says. This could be something as simple as advising you to register on a chronic programme if you have recently been diagnosed with a chronic illness, through to helping you with more complicated claims, such as those for cancer treatment.
A broker should not just refer you to the scheme’s call centre.
Venter says medical scheme brokers can advise you on how to educate yourself to ensure you are not a victim of one of the few doctors or specialists who overservice or recommend unnecessary treatments or tests such as operations, scans, X-rays and blood tests.
When there is a dispute over a claim, your healthcare broker has an obligation to take up the matter with the scheme.
Crouser says a good healthcare broker will know how to use the scheme’s structures to address your complaints.
If you are not happy with the way the scheme deals with the matter, a healthcare broker can also advise you on how to take your complaint further using the processes set out in the Medical Schemes Act, he says.
Another advantage of using a good broker is that he or she can provide an early warning system when a scheme is in trouble.
Crouser says the South African medical scheme industry is extremely dynamic, with many changes taking place and increasing financial pressure on schemes.
Besides the risk of a scheme going into liquidation or being put under curatorship, many schemes are involved in merger talks. These mergers are increasing, and they may not always be in your personal best interest, Crouser says.
A good healthcare broker monitors the year-on-year performance of the various medical schemes and the mergers. The broker will be able to guide you to a new scheme timeously if your scheme is under severe financial pressure, he says.
A good broker will fully explain to you the differences in benefits between those offered by a medical scheme registered under the Medical Schemes Act and an insurance product that may, at first glance, look like a medical scheme.
A good broker will also explain that the longer you remain out of a medical scheme, the greater your risk will be of facing higher contributions due to late-joiner penalties – penalties added to contributions that are based on the number of years you have not been a member of a scheme since the age of 35.
The rules relating to when waiting periods can be applied to your membership and whether these apply to all claims, condition- specific claims or only non-PMB claims can be difficult to follow. A good broker will explain to you what waiting periods you face and may be able to negotiate the waiting periods applied by your chosen scheme.
Andre Jacobs, an independent consultant and the chairman of the Health Industry Sector Group at the Financial Planning Institute, says more medical scheme members are making use of healthcare brokers now than before and this clearly indicates that members see value in the advice of their broker.
HOW TO FIND A GOOD BROKER
Medical scheme brokers must be accredited with the Council for Medical Schemes before they can be paid by a medical scheme.
The council only accredits brokers who have a grade 12 education or an equivalent qualification and at least two years’ experience as a broker or apprentice broker in a healthcare business.
Accreditation lasts for two years, after which it must be renewed.
The council will not accredit a broker if he or she is not fit to be one – for example, if he or she has been convicted of theft, fraud or any other offence involving dishonesty.
In addition, a broker needs to be licensed as a financial services provider in terms of the Financial Advisory and Intermediary Services Act or to be a representative of a licensed financial services provider.
Accredited brokers are listed on the Council for Medical Schemes website (www.medicalschemes.com) and you can check if a financial services provider is licensed on the Financial Services Board’s website, www.fsb.co.za.
Wynand Venter of Wynsam Wealth advises that you deal with a financial adviser who has the Certified Financial Planner accreditation and is a Financial Planning Institute (FPI) member, as you can then be sure the adviser is well qualified and adheres to the FPI’s code of conduct.
Victor Crouser, the head of the coastal division of Alexander Forbes Health, says a good healthcare broker will focus on your health needs as his or her first priority. He says it is a sad fact that there are many brokers who will try to sell you medical scheme cover with the sole intention of establishing a relationship with you and then try to sell you life and endowment products that pay higher commissions.
Venter says your healthcare broker should understand how your medical cover fits into your overall financial plan. He says a broker who doesn’t have any other financial qualifications or experience may be severely limited in his or her ability to give advice. The standard of entry is low, as brokers currently need only a matric, he says.
Medical schemes are just one part of a financial minefield that all families must negotiate to realise financial security, he says.
WHAT DOES IT COST TO USE A BROKER?
Healthcare brokers earn commission from your medical scheme, but your contributions are the same regardless of whether or not you use one – this means their advice is effectively free.
Medical schemes are, in terms of the Medical Schemes Act, allowed to pay your healthcare broker up to three percent of your contributions to a maximum of R69 plus VAT a month.
Crouser says advice at this rate is very inexpensive when you compare it with any other form of professional advice, and having access to a healthcare broker may well save you many thousands of rands over the longer term.
Venter says in comparison, the suggested rates for a Certified Financial Planner are as much as R1 000 an hour.
If you are not using a broker, check with your medical scheme if there is one linked to your account. You may be surprised to find that someone you have never seen or not seen in a long time is earning a fee to be your broker. If you no longer want the services of the broker, tell your scheme to cancel his or her services.