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BusinessDay www.businessday.co.za Thursday 20 October 2022
INSIGHTS
MEDICAL COVER OPTIONS FOR 2023 Sponsored content
Navigating the medical cover minefield
Health is your greatest asset: plan accordingly
Members need to educate themselves regarding their •rights and entitlements, writes Lynette Dicey
C
hoosing the most appropriate type of healthcare cover and figuring out the differences between medical aid schemes, gap cover and health insurance can be confusing. Medical schemes are notfor-profit entities governed by boards of trustees that operate under the Medical Schemes Act to provide funding for healthcare goods and services in return for a monthly contribution. Barry Childs, joint CEO of Insight Actuaries & Consultants, an actuarial and analytics firm practicing in the healthcare and life insurance fields, explains that medical schemes are obliged to accept any applicant, are required to provide a minimum set of benefits and can only differentiate the contribution based on income, benefit option and type of beneficiary such as the main member or dependant type. Some medical schemes, he adds, are restricted medical schemes, meaning that they are specific to an employer or an industry or association. Polmed, for example, is a scheme for the SA Police Service, while Bankmed is a medical scheme specifically designated for the banking industry. Open medical schemes, on the other hand, are open to anyone to join. However, depending on your history of medical scheme membership and pre-existing health conditions, some underwriting conditions and/or contribution penalties can be applied when joining a medical scheme. Gap cover insurance was introduced in the early 2000s in response to the growing gap between what specialists charged for their services and what medical schemes paid for specialist services, says Childs. “This gap has continued to grow, and gap cover products have become more prominent. Over time, other benefits have been added to gap cover products such as a benefit to
Barry Childs … healthcare products are complex. fund co-payments and other benefits medical schemes may not pay for in full.” Gap cover products are for-profit insurance products governed by the Short Term Insurance Act. “There are fewer requirements for gap cover insurers in terms of who they must accept on the cover, how much they can charge and the level of benefits they must provide,” explains Childs. Health insurance, on the other hand, is a broad term that includes gap cover and, more recently, primary health insurance cover. Primary health insurance products, reveals Childs, are for-profit insurers that mainly cover primary care services such as visits to a GP, basic
medication, pathology and radiology cover. They don’t usually include hospital cover or cover for serious illness such as cancer. Due to the fact that they don’t have to offer the same minimum benefits, they offer cover at a lower cost than medical schemes in return for covering less benefits. “The benefits included in primary health insurance products have been the subject of intense industry discussion since 2006. Recently the market for these products has grown as well as the need to have them formally regulated. Industry stakeholders and the regulator are in the process of formalising their place in healthcare funding in SA.” These different products all provide some degree of healthcare benefits. “In a nutshell, those who can afford medical scheme cover should join a medical scheme as early as they can as this provides the best access to private healthcare treatment, especially private hospital treatment,” says Childs. “Joining at a young age and maintaining your membership can help avoid late joiner premium penalties and underwriting. Depending on the benefits of your particular medical scheme, you might also want to buy gap cover if you can afford it on top of your
medical scheme contribution and are worried about shortfalls given the difference between what your medical scheme will pay and what specialists might charge above the so-called medical scheme rate.” He suggests primary care insurance for those who can’t afford medical scheme cover
MOST SCHEMES ALLOW YOU TO CHANGE THE BENEFIT OPTION ONCE A YEAR — USUALLY IN JANUARY — IF YOU DECIDE YOU NEED MORE COVER but still want funding for primary care benefits such as GP visits, some limited medicine and basic dentistry from private healthcare providers. However, he warns that health insurance does not
replace medical aid. “It’s important to understand the benefit brochure of whatever you buy as, unfortunately, healthcare products are complex,” he cautions. “When choosing what cover to buy, balance your expected healthcare needs with affordability. Most medical schemes allow you to change the benefit option once a year — usually in January — if you decide you need more cover. When you apply to a scheme for membership, be prepared to answer some complex questions, including what cover you have previously had, your reason for changing schemes and information on medical conditions, which can affect whether you get any underwriting or contribution penalties imposed for only joining later in life.” Conceding that navigating the fine print can be complicated, he says members need to educate themselves regarding their rights and entitlements. “Benefits can change yearly so it’s difficult knowing what you are covered for and what you are not covered for, particularly for unanticipated health events such as surgery. It’s a good idea to stay abreast of what benefits are offered by your scheme.” He suggests working through a broker for advice. “It doesn’t cost any more to use a broker as their commission is built into the premium. A good broker is likely to be more familiar with any changes and the issues that tend to come up regularly and should help navigate those changes for you. They can also deal with service complaints and benefit queries.”
For many people, medical scheme membership is a grudge monthly payment. Although some young people choose to delay becoming a member of a medical aid, Alan Fritz, acting principal officer of Medshield Medical Scheme, points out that the Medical Schemes Act allows schemes to impose waiting periods and late-joiner penalties on those who only join a scheme later in life. “Your health is your greatest asset, so it requires careful financial consideration and planning,” advises Fritz. “Choosing the right plan can be pretty complex. You need to consider what type of plan you can afford and your current health status, including your age and other risk factors.” Most medical schemes, including Medshield, offer various plans to suit different lifestyles and age groups with cover that caters for the individual from childhood to adulthood and well into old age. “We partner with capable and quality healthcare providers and negotiate with those partners to provide value for money services to our members. With more than 50 years’ experience and a solid financial and claims paying ability track record, Medshield members are assured that their health is in good hands for the long term.” Medshield members have access to a loyalty programme through Elevate and Just Rewards which provides access to new technology that records and stores their lifestyle data in one place and rewards them for healthy behaviour. It also links to smartphones and wearable
Alan Fritz … unlimited in-hospital cover at the very least. devices to measure and reward them for their physical activity. Rewards include grocery savings, legal benefits, dining out, movie, retail and gym membership benefits. Fritz reveals that Medshield has a plan for every stage of life. MediCurve is an affordable digital plan aimed at young, healthy, tech-savvy, first-time medical aid buyers. It offers a bouquet of in-hospital and out-of-hospital benefits with free, unlimited virtual family practitioner consultations through the Medshield SmartCare benefits. MediSwift is a cost-effective, value-based hospital plan that provides amateur sportsmen and women with additional physiotherapy and biokinetics benefits for both in-hospital and out-of-hospital. The MediPhila option provides protection from unforeseen medical costs through unlimited hospital cover for PMB conditions, per
beneficiary limits for non-PMB in-hospital treatments and an out-of-hospital benefit limit for specific services. For young families, MediValue is a good option, providing for unlimited hospital and partial day-to-day cover. This option has both a Prime and Compact category. The benefits are the same in both, but for a smaller contribution, the Compact category requires the compulsory use of Medshield Provider Networks. MediSaver is aimed at independent individuals who want to manage their own out-of-hospital healthcare expenses through a personal savings account with unlimited hospital cover. MediPlus is aimed at middle to upper-income earners, offering unlimited in-hospital cover and a generous day-today limit. This option has both a Prime and Compact category. The benefits of both are the same, but the latter requires the compulsory use of Medshield Provider Networks. MediBonus is a good choice for corporate employees and individuals who need comprehensive unlimited inhospital cover and extensive day-to-day benefits while PremiumPlus provides the most comprehensive cover with freedom of choice including no network restrictions, 200% cover for certain in-hospital procedures and a personal savings account. At the very least, everyone should have unlimited inhospital cover in case of major medical emergencies, advises Fritz, adding that MediCore is a hospital plan for those who require unlimited hospital cover, with full PMB cover.
Gap cover can reduce co-payments, shortfalls Even with medical cover there are often significant copayments, particularly on more affordable plan options where there are often shortfalls, particularly when it comes to specialist treatment in hospital. Tony Singleton, CEO at Turnberry Management Risk Options, points out that funding these shortfalls can place a strain on already stretched budgets. “One of the most affordable ways to ensure that quality healthcare can be funded is to augment medical aid cover with an appropriate gap cover policy,” he says. “Often, the more cost-effective medical scheme options have limited cover for in-hospital treatment and also make use of a specific network of hospitals, so when doctors charge more than medical aid rates or your make use of hospitals outside of the network, there will be shortfalls to fund.” Gap cover, he says, can help to maximise cover and reduce those co-payments and shortfalls. “Certain gap cover options and providers offer additional value, through things such as
Tony Singleton … augment. casualty benefits that cover the expense of visits to the emergency room or trauma counselling,” says Singleton. Gap cover policies are becoming an increasingly important component of medical insurance, agrees financial adviser Dawn Ridler. She believes it often makes sense to take a lower-priced medical aid plan, self-fund the day-to-day costs, but top up with gap cover. It is not necessary to use the same gap cover provider as a medical scheme provider, says
Barry Childs, joint CEO of Insight Actuaries & Consultants. “Having both your gap cover and your medical scheme membership with the same provider can make some things easier, like only having to submit the claim once to one party rather than two separate entities to each pay their part. Bear in mind, however, that sometimes using the same party comes with additional restrictions. While some additional administration is required if you use a different gap provider rather than the medical scheme provider, you shouldn’t be worse off.” Ridler explains that should medical schemes fall away if NHI is implemented as government intends, then a combination of gap cover combined with life insurance which includes dread disease cover could well step into the breach left by medical aids, if it ever comes to that. “This cover, paid out for an event, such as cancer, and therefore not a medical aid, would in effect give the member a lump sum to seek private care, even outside of the country if necessary,” she says.