Choosing the right medical scheme option for you.
It’s that time of year again, where your medical scheme will be sharing their benefit and contribution changes for next year. While you don’t HAVE to change your option, we strongly recommend that you review your plan to ensure it continues to meet your specific needs and your pocket.
What should you consider when you review your medical scheme cover?
Like a Rubik’s Cube, the medical scheme environment can be difficult to navigate. With the large number of schemes to choose from, along with the wide range of benefits and available options, making meaningful comparisons can be confusing.
Contributions to your medical scheme make up a substantial portion of most households’ monthly expenses, so it’s important to figure out which plan works for your budget and your family’s health needs.
Selecting the right option starts by understanding what benefits are being offered to you, what is excluded, and how these relate to your family circumstances. Here are some of the things you should consider when assessing your medical cover for next year:
1.What type of cover do you prefer?
There are three main option types:
New Generation: day-to-day benefits are provided through a personal medical savings account.
Traditional: claims are paid from a pool of funds and each benefit category has a sub-limit applicable.
Capitated: provides cover through a network of Designated Service Providers (DSP). These options are cost effective but can be restrictive in terms of benefits and freedom of choice.
Tip: Generally, the more freedom it gives you to choose a healthcare provider, treatment or medication, the more that option will cost.
2.What level of hospital benefits do you require?
At what rate will the providers be reimbursed? Medical Scheme Tariff means the rate at which the scheme will refund medical expenses, or the fee determined through an agreement between the Scheme and a provider(s) – anything between 100% to 300%
Tip: Confirm that your provider is part of your schemes DSP’s, to ensure their charges will be covered in full.
What is the impact of selecting an option linked to a Hospital Network? It’s important to check if your practitioner practices from a network hospital and that you can access that network.
You’ll have to pay penalties if you voluntarily use a non-network hospital, when your admission is not linked to an emergency.
Are procedures excluded?
Ensure that you don’t require a procedure on the exclusion list, as the scheme will not provide cover for costs linked to these procedures.
Tip: All plans have to provide for PMB’s, which ensures that you are covered for emergencies, specified hospital events, chronic conditions and oncology treatment (protocols, formularies and DSP’s apply).
What co-payments and/or deductibles are applicable? Certain options impose deductibles or co-payments on specific procedures.
Both are payments that a member needs to make to the provider, prior to the procedure being done, but you can only claim back the co-payment from available savings.
Tip: Due to increasing shortfalls in reimbursement rates, co-payments and deductibles, we recommend that you speak to your Healthcare consultant about gap insurance to protect against these unexpected costs.
3.Which plans will cover your chronic medication needs best?
Are your conditions classified as a Chronic Conditions? The Chronic Benefit covers certain life-threatening conditions that need ongoing treatment and includes cover for the 25 Prescribed Minimum Benefits (PMB) conditions. However, conditions covered are dependent on your scheme and option.
Accessing the benefit is subject to registration and approval.
Balancing the cost of your treatment against the contributions. Compare the cost of your medication against the contribution linked to the option that provides cover for the treatment. It might be prudent to opt for a lower option and use your acute medication / savings to cover the medication cost.
What is a medication formulary?
A formulary is a list of safe and effective medicines that can be prescribed to treat certain conditions. If you don’t stick to the formulary, you will be faced with a co-payment.
Tip: To avoid having to make a co-payment, members need to adhere to the medical scheme’s prescribed basket of benefits, for each of the chronic conditions.
4.Are you or one of your dependents currently undergoing cancer treatment?
Is there a benefit limit? This benefit usually has a set limit, which is either linked to an annual or specified cycle.
Once the limit is reached, the scheme either ceases payment, with the exception of PMB related procedures, or imposes a member co-payment.
What treatment is covered?
Certain options do not provide cover for biological medication and limit their benefits to PMB protocols.
5.How do you know if your day-to-day benefits are sufficient?
Undertake a needs analysis and review your claims history as a guide, in order to select the appropriate option.
Annual contributions, day-to-day allowances and medical expenses all come into play in arriving at a decision.
Affordability measured against the benefit richness of the option should help guide your choice, while taking into account that no one can predict health risks that may arise.
Tip: Selecting a more comprehensive option doesn’t always translate to better value for money. Accordingly, we recommend that together with your healthcare consultant that you conduct a need’s analysis.
Selecting the correct option can be somewhat overwhelming and for this reason, your healthcare consultant is available to help you make an informed decision, ensuring that you understand how your plan will provide for you during next year.
Author: Charleen Rix, CFP®
Head of Healthcare, Sasfin Wealth