Nicola Mawson
With medical aids such as Discovery putting their premiums up across the board at a rate higher than the consumer price index, shopping around for a cheaper option might seem like a good idea.
At Discovery, there will be a weighted average increase of 9.3% next year across all plans. These higher than the cost-of-living increases are the result of something known as medical inflation, which the Council for Medical Schemes explains includes aspects such as age demographics, increased cost of medical equipment and medicine, as well as the volume of claims.
There are several aspects to consider when moving medical aids, or even joining one for the first time, including cost.
Kia Brokers managing member Gerald Kahn said, “If you are young, disciplined, and generally in good health with no chronic illness, you may want to look at just having a hospital plan and gap cover, while diligently putting away the equivalent of a monthly medical aid premium into an investment vehicle that can quickly be accessed, while earning interest”.
“However, you do need to take into account the fact that there may be a waiting period if you do decide to upgrade to a full medical aid with the savings component and you’ll need to be able to cover this time, which is typically three months,” Kahn said.
Richard Clemitson, Specialist Health and Gap Cover Advisor at Atacus Financial Services, added that another issue is reputation. “Which medical aid pays claims back the quickest without jumping through hoops; how good is their administration?”
Clemitson said its important to consider the hospital cover, as being admitted could bring with it a huge cost. Most doctors, he said, charge more than the 100% scheme rate many plans offer. This requires selecting a plan with a 200% cover amount, and considering gap cover, he noted.
Another way to save would be to look at using a medical scheme’s hospital network, which keeps costs down without compromising cover, he said.
He explained that all medical aids are compelled to cover 27 chronic conditions. However, covering a condition not on that list means a higher plan option. The increased coverage, however, needs to be worth the increased premium, he said.
When it comes to cancer, different plans will have a different levels of oncology cover and high-end biologic medication would only be covered on the top plan options, he said.
Consumers also need to think about day-to-day needs, such as GP visits and medication. Clemitson said, here, one can look at funding these themselves and having a hospital plan with gap cover, while others will choose to have a medical savings account from which to fund contact lens purchases, for example.
The savings account belongs to the member and can be carried over from year-to-year if not used, paid out if they resign the medical aid, or transferred to another medical aid if needed, Clemitson said.
Given all these complexities, both Kahn and Clemitson recommend speaking with a professional to understand various offerings, as no two medical aid plans can be directly compared.
1. What questions to ask before choosing a medical aid:
2. What is your age and salary?
3. Are you married and do you have any children?
4. Do you go to the doctor often?
5. Do you have any chronic conditions?
6. Have you ever been on a medical aid before?
7. Would you need dentistry and optometry?
8. What is your budget?
9. Are you happy to use network hospitals and doctors?
10. How long has the medical aid been in existence?
11. What have their increases been over the last five years?
12. What reviews do they have based on their service?
Source: Kahn
PERSONAL FINANCE