You don’t have to belong to the most expensive medical scheme option to receive the richest hospital benefits, Hloni Mphahlele, a consulting manager at Alexander Forbes Health, says.
Medical schemes typically have a range of options, and you need to understand the differences between the benefits offered by each option, but you don’t need the most expensive option to have good hospital cover, she says.
As long as you understand that you should not expect to pay for an Uno and get a Bentley, you can adequately protect yourself from the risks of high hospital costs on cheaper options and manage your day-to-day costs in line with your needs.
Cheaper medical scheme options limit hospital cover to hospitals within a network and/or pay lower amounts to specialists and for the treatment of major medical conditions. Most hospitals will charge a scheme negotiated tariff, while the practitioners that treat you in hospital may charge above the scheme negotiated tariff, leaving you exposed, Mphahlele says.
The fact that practitioners who treat you in hospital may not charge the same rates at which your scheme will reimburse them is a challenge, but you can protect yourself with a gap-cover insurance policy.
The Competition Commission’s inquiry into private healthcare cover will consider the problems that specialists’ charges pose for consumers, and many people hope that the outcome will be regulated tariffs, she says.
Another benefit that differentiates options is how they cover chronic conditions, Mphahlele says.
All medical scheme options have to provide cover for the 26 common chronic conditions that are prescribed minimum benefits (PMBs), but some options offer cover for an extended list of chronic conditions, which may be a valuable benefit if you suffer from one of the less common chronic illnesses, Mphahlele says.
More expensive options typically offer a wider choice of medicines for chronic conditions, whereas cheaper ones will have a list or formulary of approved medicines, with particular medicines for each chronic condition. You have to use the medicine on the formulary to be covered, unless you appeal to the scheme and your doctor can provide reasons the formulary medication is not suitable for you, Mphahlele says.
More expensive medical scheme options typically have higher contributions to medical savings accounts, which mean you receive more day-to-day cover, she says. You need to weigh up this benefit against setting aside the money yourself to fund your day-to-day needs.
Some higher-cost options also offer above-threshold benefits that cover day-to-day expenses once your medical savings account has been depleted.
However, there are few things you need to know about above-threshold benefits. The first is that the benefits typically apply only after your claims exceed the self-payment gap – the gap between your medical savings account and the threshold at which above-threshold benefits apply.
Your claims for day-to-day medical expenses may be taken into account to determine whether you have reached the threshold only if these expenses are deemed “essential”. For example, claims for over-the-counter medicines may be excluded, Mphahlele says.
The amount of your claims that count towards the threshold may also be limited, for example R1 000 for spectacles, she says.
As a result of these conditions, the self-payment gap may be wider than you expected – that is, greater than the difference between what you contribute to a medical savings account and the threshold.
Some schemes offer day-to-day benefits paid by the scheme instead of, or in addition to, a medical savings account. Be aware that these day-to-day benefits do not roll over from one year to the next, as does the balance in your medical savings account, so, if you do not use them in a particular year, you lose them, Mphahlele says.
You can change benefit options each year at the beginning of the year. This enables you take out cheaper cover when your day-to-day healthcare needs are lower and increase your cover as your healthcare needs increase. Some schemes also allow you to downgrade options during the year.
Many schemes allow you to spend your medical savings account balance for the year from the beginning of the year. If you then want to downgrade your option during the year, but have used more medical savings than you contributed, the scheme will claw back the amounts you spent in advance, she says.
Schemes typically have a matrix of options to which they will allow you to downgrade during the year, Mphahlele says.