By Rachel Janssens
Having a medical aid could save your life if you are in an accident or diagnosed with a serious illness. Medical aid schemes are a form of insurance which cover medical expenses incurred at a hospital, medical facility or an accredited healthcare professional, regulated by the Medical Schemes Act and the Council for Medical Schemes.
Having a medical aid affords the luxury of going to a private hospital and not being exposed to the over-burdened public health system.
Why you need medical aid
All medical aids offer protection against the high costs of hospitalisation and other related healthcare expenses during an unforeseen life-threatening medical emergency or certain planned procedures and chronic conditions as listed in the Act. Members can select an option that will cover more frequent day-to-day medical expenses if they have a need for more cover. It is therefore important to have cover to protect you from unplanned costs and using your own funds, particularly for these high costs.
Understanding medical aid options
Not only are there a vast number of medical schemes to choose from, but also a number of options to choose from within the various medical schemes. All medical schemes need to cover a minimum set of benefits, as mentioned above. Each option on each medical scheme then covers additional medical expenses based on their benefit structures.
Medical scheme options can be broken up into four main categories:
1. New-generation options
Day-to-day expenses are funded from a savings account, which is set according to your family size. Medical savings are provided to you up front for the year, in the form of a credit, to cover your day-to-day, out-of-hospital expenses such as GP consultations, medication, dentistry, optometry and radiology. An advantage to having a savings account is that if you do not claim the full allocated savings for that year, the balance carries over to the next year, allowing you to build up funds. These options are suitable to those who prefer the freedom to use the savings as they wish.
2. Traditional options
These give you a set amount of benefits for certain categories of cover. For example, a limit is imposed on GP consultations or a benefit limit is set for medication or radiology. Unused benefits do not carry over in a traditional set-up. The advantage of these type of options is that running out of one benefit, for example dentistry, does not affect the rest of your available benefits, for example optometry, as they are separated benefit limits. The disadvantage is that you still pay for the benefits you do not need or use.
3. Hospital plans
These provide cover for in-hospital treatment and do not cover any out-of-hospital expenses. These plans are suitable for someone just looking for hospital cover while funding other day-to-day expenses out of their own pocket.
4. Network or primary care low-cost options
These are more restrictive, offering basic primary healthcare with set limits, provider networks and exclusions. Contributions to these plans are usually based on your monthly income, so the more you earn the higher the contribution. These options are more suited to lower-income members, who are looking for affordable basic cover and do not mind using doctors prescribed by the schemes.
How to choose the best option?
There are various considerations when selecting what medical scheme and option to choose:
- What are the service levels of a medical aid, efficiency of claims resolutions and claims processing?
- What level of hospital cover you need and do you prefer freedom of choice or do you mind being limited to a network?
- What level of day-to-day cover do you need and do you have specific medical requirements?
- What chronic conditions do you have and how much are the treatment and medication costing you?
- What waiting periods, condition-specific exclusions and late joiner penalties might you be exposed to?
- How stable is the medical scheme financially and what is its size and membership profile?
Seek guidance from a broker
Considering the amount of options available and complex terminology, it is important to seek out a good healthcare adviser. They can help you find the best fit for you and your family, based on your financial affordability and healthcare needs. This does not cost extra and is built into your medical aid rate.
A healthcare adviser will do an in-depth analysis of the medical scheme and its options and guide you to the most suitable option based on your health history, future needs and affordability.
They can help determine if you will be exposed to any waiting periods, exclusions on pre-existing conditions and or late joiner penalties based on your medical aid cover history and age. Should you have any shortfalls on the medical scheme option you select, a healthcare adviser can also suggest gap cover.
Rachel Janssens is the principal consultant at Alexforbes Health