JOHANNESBURG - It's that time of year again, when medical schemes announce their benefit changes and costs for the year ahead. Given that medical scheme costs are escalating faster than inflation, it can be tempting to look for ways to save. But it’s important to consider your circumstances and your health before ticking the box for the least expensive option.

The average increase this year is between 8% and 10%, compared with inflation of about 4.9%. Due to rising costs, many medical schemes are responding by not increasing certain benefits (such as oncology), so be sure to look at any benefit changes and compare exclusions.

If you selected a hospital plan when you were young and single, and have not changed your plan since then, a detailed review may be long overdue. Most people think they will be able to fund the costs of an occasional doctor’s visit themselves. However, when you get seriously ill, require an out-of-hospital procedure, or family members get sick at the same time, you may find yourself having to fund medical costs on credit. If you do not belong to a medical scheme, the consequences could be devastating.

The main determinant should be your medical needs, and it’s important to have a good understanding of what benefits are covered by which options and on which medical schemes. Affordability is important when it comes to selecting the right fit, but it should not be the only consideration.

In making your choice, it is important to bear the following points in mind:

* Most medical schemes will cover in-hospital costs (that is, when you are admitted to hospital) within certain limits. However, it does not mean that they cover all costs of being in hospital. Make sure you understand exactly what they do and don’t cover.

* All members are covered for prescribed minimum benefits (PMBs), which include 270 hospital procedures and 26 chronic conditions identified by law. Most of the common chronic illnesses (such as hypertension, cholesterol, asthma, diabetes) are covered by the PMBs. Note that medical schemes are allowed to stipulate that members must use the scheme’s designated service providers to receive full cover.

* Beyond this, the detail will depend on the option selected:

* Most schemes cover additional chronic diseases on their more comprehensive options. Investigate which options, on which schemes, provide the cover you require.

* Medical schemes may limit what they pay in the case of serious illnesses, such as cancer, or mental illness or pregnancy (unless they qualify under the PMBs). In the first case, they may not pay for certain drugs, and in the latter case they may pay only for a certain number of scans and doctors’ visits.

* Minor procedures that do not require staying in hospital overnight are categorised as “out-of-hospital procedures” and are not covered under in-hospital costs. Check how your plan handles these costs.

* Day-to-day benefits cover other expenses typically not covered in terms of any of the other categories - for example, GP consultations, medication, optometry, radiology and pathology.

Members can change their option annually at this time of year. If you are considering changing schemes, be sure to clarify whether any waiting periods will apply before switching.

The right choice is the option that suits your medical needs and your pocket. If you’re in doubt, consult a medical scheme consultant or broker. He or she will be able to provide guidance on the right option for your circumstances, at no cost to you.

Shreekanth Sing is technical legal adviser at PSG Wealth.

PERSONAL FINANCE