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Health cover is the most vital of your household expenses, says Craig Comrie, the chief executive of Profmed. However, with so many ways to buy cover, it’s important to choose one that is right for your health needs and will not leave you financially ruined.

Tip 1. Find a medical scheme you can trust. All medical schemes should be registered with the Council for Medical Schemes (CMS). If you are worried that a provider is not legitimate, you can go to the CMS website to verify its validity.

No one knows your needs better than you. It’s up to you to do your own research. Schemes provide smart online capabilities that can compare their products. Consumer feedback portals also provide first-hand accounts on how schemes treat their members.

“You can also speak to a broker,” says Comrie. “With so many schemes out there, it can feel impossible to properly weigh up the pros and cons of them all. A reputable broker has knowledge of the different schemes and can provide a personalised answer based on your needs.”

Tip 2. Know the difference between a medical scheme and health insurance. Confusion tends to set in when deliberating the difference between medical schemes and health insurance. In the end, it comes down to cost versus benefits - and remember that cheap usually means fewer benefits.

“If you need peace of mind or more generous care, you definitely need a medical scheme. If you are looking for affordable basic cover under R500 a month, you can look at health insurance,” says Comrie.

You should, however, be aware that health insurance products typically pay a larger proportion of your premium to marketing, distribution and administration costs.

When you belong to a scheme, you are effectively a shareholder of the business, and any remaining profit or “surplus” at the end of the year is saved for future claims.

Even the lowest level of medical scheme cover - sometimes referred to as a “hospital plan” - must offer the prescribed minimum benefits (PMBs). These are benefits that ensure that all medical scheme members - regardless of the provider and the benefit option - have access to certain minimum health services.

PMBs are defined in the Medical Schemes Act, and all medical schemes have to cover the costs related to the diagnosis, treatment and care of:

* Any emergency condition;

* A limited set of 270 medical conditions (defined in the Diagnosis Treatment Pairs); and

* 25 chronic conditions (defined in the Chronic Disease List).

Medical insurance pays a set amount for your stay in hospital. This is often not enough considering the high costs of medical care in a general, high care or intensive care unit.

Tip 3. Understand the limits of a hospital plan. To cut costs, many people choose to downgrade their medical scheme cover to a hospital plan.

You need to be aware that every visit to a hospital emergency room does not count as hospitalisation. Even if you think it was a medical emergency, there is a difference between being treated as an out-patient and being admitted, and so some visits to emergency rooms may, in fact, come from your day-to-day or savings benefits unless you are admitted.

“It is critical to understand that many schemes have a limit on their hospital cover,” says Comrie. “They will require you to attend only certain hospitals and may have a hospital limit on what is covered depending on your scheme and plan.”

For example, Profmed recently covered a young member involved in a motorcycle accident that resulted in an extended stay in hospital with significant rehabilitation which cost R3.5 million. Limited cover can lead to financial ruin, or may even land you in a public facility if you don’t have the right plan from the start.

Tip 4. When first becoming a member of a scheme, prepare to wait. If you are looking to sign up for a medical scheme, you can almost certainly expect a waiting period. There are two types of waiting periods or underwriting conditions:

* The general waiting period. If you are healthy, under 35 and haven’t been on a medical scheme before, you will generally have to wait three months before full cover takes effect.

* The condition-specific waiting period. This applies if you have a pre-existing condition or injury prior to joining the scheme. In these cases, the standard practice is that schemes apply a 12-month condition-specific waiting period before you can access benefits relating to these pre-existing conditions, which is standard practice.

“It is best to disclose your pre-existing conditions, as three or 12 months is not a long time to wait,” says Comrie. “This is a contractual relationship at the end of the day, and by not disclosing your condition after signing the contract, the scheme has full rights to terminate you from the scheme and refuse cover.”

In addition, if you delay becoming a member of a medical scheme, you may be required to pay late-joiner penalties for the rest of your life. These are applied by all schemes to encourage younger members to join early rather when it’s too late. These penalties will follow you regardless if you move medical schemes at a later stage and can cost you up to 50 percent more than the scheme premium, depending on your age.

Tip 5. Be careful of loyalty frills. “It’s easy to get caught up in the excitement of loyalty benefits,” says Comrie. “The reality is that promoting healthy behaviour improves your lifestyle, but things such as discounted flights or free movie tickets won’t help you when you have a car accident and are taken to the ICU.”

He says many people mistake frills and loyalty-based products as core healthcare benefits, only to discover that they don’t have the proper cover they need when the time comes.

“Don’t be fooled by big brands that market frills, because you will literally pay the price when it is too late,” says Comrie.

Ultimately, it’s important to understand the pros and cons of choosing a medical scheme based on your needs and affordability. 

PERSONAL FINANCE