Choosing a medical scheme from those available to you and then choosing a plan, or option, offered by the scheme that fits in with both what you can afford and the level of health care you need is likely to leave you dazed and confused. Not only are many offerings by the medical schemes highly complex, but myriad differences make them difficult to compare.
The annual GTC Medical Aid Survey does much of the hard work for you by analysing and rating medical schemes and providing a standardised comparison and ranking of the choices available to you – and the results of the 2017 survey have just been published.
GTC, formerly Grant Thornton Capital, is a leading financial advisory business, established in 1991 from within the Grant Thornton Johannesburg audit practice, itself part of Grant Thornton International.
The medical scheme survey has been produced annually since 2011.
Jill Larkan, the head of healthcare consulting at GTC, who is responsible for the survey, says it “cuts through the notoriously complicated landscape of the medical aid industry and simplifies it according to the factors that matter most when consumers choose a medical scheme and option”.
Commenting on the 2017 survey, Larkan says although smaller medical schemes are offering good value for money, they have not been as successful as some of the larger schemes in attracting new members, which is essential for the financial health of the scheme over the long term.
This year’s survey reviewed 23 open medical schemes and one closed (limited-membership) scheme, with a total of 144 options, which fell into 11 categories according to the benefits offered. The categories ranged from entry-level and hospital options to saver and comprehensive options. Healthcare policies offered by insurance companies were excluded.
When you compare medical scheme offerings, you’re likely to concentrate on value for money: what you get in return for your monthly contribution. But you also need to consider how financially healthy the scheme is, and how sustainable it is into the future.
Both the value-for-money and the financial health aspects are taken into account in the survey, which gives each option a micro rating (indicating an option’s value-for-money competitiveness in relation to others in the same category) and a macro rating (which considers factors such as membership size and growth, average age and financial stability).
“Fedhealth is one of the schemes that has performed consistently well in the micro ratings, indicating that it is very competitively priced and can offer consumers good value for money,” Larkan says.
Discovery Health, the country’s largest open scheme, came tops in the macro ratings.
The options were further divided into network and non-network options (those that confine members to a network of providers versus those that let members freely choose their providers) and were rated according to three types of membership: single, couple (two adults) and family (two adults and two children).
The full survey, which is available here, provides detailed scoring and cost analysis, which is then simplified by GTC’s “likelihood of support” rating of high, medium, or low, Larkan says. “This indicates the likelihood of us recommending a particular plan, given the scores.”
The macro and micro rankings combine to create GTC’s overall list of schemes ranked by “likelihood of support” (see table).
Larkan says: “The list reflects the overall best-scoring plans in our comparisons across all sectors. This is by no means a definitive or final rating, as ‘soft’ factors, such as existing servicing relationships, past experience, administration ability, and customer service, have not been taken into account.”
CATEGORIES OF OPTIONS SURVEYED
THE GTC survey’s categories of options are as follows (the number in brackets indicates the number of options rated):
• Entry level. These options generally provide in- and out-of-hospital benefits within defined networks and formularies (lists of medicines) and are aimed at lower-income earners, students and young workers. They allow beneficiaries to access certain private hospitals (except the “state” category), as well as practitioners who belong to networks.
- Core (1)
- Student (5)
- Low-salary band – state (3)
- Low-salary band (18)
- Mid-salary band (18)
• Hospital-only (32). These options provide in-hospital cover only, with the exception of certain chronic illnesses and prescribed minimum benefits, which are provided by all registered medical schemes.
• Saver (37). These options provide in-hospital benefits at various levels and, in addition, access to out-of-hospital benefits via an out-of-hospital benefit and/or savings account.
• Saver plus (20). In addition to providing in-hospital benefits, these options have two distinct out-of-hospital funding accounts, occasionally separated by a self-payment gap. The initial account will typically fund claims until it is exhausted. Thereafter, members will progress into the self-payment gap and be required to fund their own expenses until these reach a predetermined threshold, or they will immediately progress to the secondary account, payable from the risk benefit.
• Comprehensive (15). These plans typically have an unlimited above-threshhold benefit or an unlimited additional or secondary out-of-hospital benefit account or savings account. They commonly include a medical savings account, have a self-payment gap and an unlimited above-threshhold benefit.
• Traditional plans (28). These older types of cover were not rated because of the variability of the benefits offered.
HOW TO OPTIMISE YOUR BENEFITS
One finding of the survey was that many consumers were unsure of their own medical scheme details and their entitled benefits. “We have found that many consumers tend to be largely ignorant about which medical scheme option they are on and what benefits this entitles them to,” Jill Larkan says.
She points out that you can potentially save significantly if you do an honest and thorough analysis of your real medical needs. Your monthly medical scheme contribution includes a fee for professional guidance and advice, something of which many people are unaware, and Larkan says the assistance of a professional healthcare consultant should never be underestimated.
“One example of saving is to use a medical scheme’s network option. People living in an area where there is a comprehensive network of preferred medical practitioners and hospitals can downgrade and get the same benefits for a lower price.
“Too many consumers stay on the same plan for years, regardless of how their circumstances or plan’s benefits change. This means people tend to pay for benefits they don’t need, or they are unaware of benefits that are no longer provided,” Larkan says.
She says you can start your selection process by considering three basic factors:
• Level of in-hospital cover. This depends largely on the level of risk you want to carry if you have to be hospitalised in the next 12 months. Hospital fees are typically covered in full, but specialist fees are covered at different levels, which could be from 100% to 300% of the scheme’s set rates. You may consider gap cover, a short-term insurance product designed to cover the shortfall.
• Network options. “This depends on whether you accept a discounted premium rate in exchange for having access to a limited network of hospitals and service providers,” Larkan says.
• Out-of-hospital charges. Here you need to consider to what extent you are willing to pay for non-hospital expenses out of your own pocket.