The Medical Aid Mystery
Medical schemes can be complicated things.
If you have just joined one, or you’ve been a member for a long time, but there are things you’re not sure of, take a look at these quick explanations. They might help you get across a medical scheme hurdle or two.
Remember that all schemes have their own rules and regulations, and if you need exact information about rules and benefits, it is essential that you contact your scheme directly.
Medical schemes are not profit-making businesses – their income comes from the contributions of their members and their expenses are made up by two things: claims they pay out and administration costs. The actual company administering the scheme can legally make a profit. This is usually quite small in comparison to the costs of medical claims.
For a variety of reasons, most medical schemes have experienced a sharp increase in claims expenditures over the last couple of years. Schemes have tried in different ways to protect their reserves, in order to prevent insolvency. The Council for Medical Schemes, the regulatory body, requires schemes to have at least 25% of their contributions in reserve.
Many members feel somewhat resentful that they have to make co-payments after paying their monthly contributions.
Here are seven things you need to know about being a medical scheme member, and claiming for your medical treatment.
MSA. This stands for Medical Savings Account. What it comes down to is that a portion of your monthly contribution (no more than 25%) is made available to you for covering your day-to-day costs and acute medication costs (once-off prescriptions). This is used to pay GPs and specialists and certain other health practitioners, such as physiotherapists and psychotherapists. Schemes say this is to prevent over-use, but many members run out of benefits long before the year is over. This means that they have to cover day-to-day expenses out of their own pockets. MSAs are made available to members upfront at the beginning of the year. This sometimes causes a problem if someone resigns from the fund halfway through the year, but they have used up their MSA.
Self-payment gap. Many schemes have a SPG. This is a predetermined amount that a member has to settle for medical bills after the MSA has been exhausted. After that many schemes have a threshold benefit that kicks in. Here’s an example: Member A pays in R2000 per month as a contribution. Her medical scheme gives her 20% of this amount as an MSA upfront in January. That means her MSA for the year will be R4800. If she has used this up, she is now in the SPG. In her case, she must pay the next R3000 out of her own pocket, after which her threshold benefit will kick in.
Threshold benefit. This is a predetermined amount of money that will be paid out to a member for day-to-day expenses after they have spent all the money in their MSA, and they are through the self-payment gap. It differs from scheme to scheme and from option to option. (Do remember that just about no hospital plans have any of these benefits). It is important to continue submitting claims to your scheme even after your MSA is depleted, otherwise they will not know when you are eligible for threshold benefits.
100% of fund rate. Many people are under the very mistaken impression that if they have cover of 100% of the fund rate, all their hospital bills will be covered. Not so. Doctors in private hospitals are not bound to charge medical scheme rates. Do find out what the fund rate is for the option you have. If your scheme will pay R3000 for a certain procedure, and your doctor charges R5000, you will be liable for the difference. Some more expensive scheme options will pay up to 200% of fund rate. Remember that doctors seldom have set fees – many of them are open to negotiation. Don’t be shy.
Cancer treatment. Many schemes set a monetary limit on cancer treatment (R350 000, or R400 000, or whatever per annum per family). If your cancer risk is high, it might be an idea to look for an option that has more extensive cancer cover, as costs for cancer treatment can escalate quickly. The last thing you need when dealing with cancer is to worry about finances. Consider taking out Dread Disease Cover in addition to your medical scheme cover.
Co-payments. These are medical costs which you have to pay in part, because the procedure or the medication is not covered fully by your scheme. If your scheme will only pay R1800 per annum for the services of an optician, and your new glasses cost R2400, you will have to pay in R600.
Medicines formulary. All schemes have to pay prescribed Minimum Benefits for the treatment of certain conditions. Some schemes have put together a medicines formulary, according to which they will pay a rand value for the treatment of certain chronic conditions. If a member is unwilling to use generic medication, he will sometimes have to foot the bill for the brand name medication. Your pharmacist will be able to give you information about generic medication.
It is in the interests of you and your family’s health and well-being to join the best one you can find, remaining a member for as long as possible in order to keep the premiums affordable.
Here are the 10 most important facts about medical aid schemes that you should keep in mind when looking for the medical aid scheme that suits you.
- There are 93 medical aid schemes in South Africa. Most of these are restricted, meaning that only employees of certain companies can join them, such as the AECI medical scheme for employees of AECI. The other kind are so-called open schemes that anyone may join, such as the Discovery Health Medical Scheme and the Sizwe Medical Fund.
- Open medical aid schemes are open to anyone while restricted medical schemes are exclusively for the employees or members of a company or institution and their families. Open medical aid schemes are obliged to accept anyone as a member. They give a the prospective member a tailored quote before the person agrees to join and the schemes are obliged to accept your dependents as members too.
- You can join a medical scheme via a broker or directly.
- It is illegal to belong to more than one medical scheme at a time.
- The body that oversees the medical aid industry is the Council for Medical Schemes (CMS).
- The legislation governing the medical aid schemes is the Medical Schemes Act of 1998, which came into operation on 1 February 1999. The regulations relating to the Act came into effect in the following two years.
- The Medical Schemes Act requires every medical scheme to provide Prescribed Minimum Benefits (PMBs), which number some 300 conditions, including about 27 chronic conditions. Medical schemes are obliged to pay all the costs of these including diagnosis, treatment, hospitalisation and medication.
- There are certain steps that must be taken before you can draw benefits. It is important to understand these. For instance, you may need pre-authorisation for certain treatments and hospital admissions, or you may be obliged to use a Designated Service Provider (DSP), meaning a certain doctor or specialist or hospital in terms of the rules of your medical scheme. Every claim must include the correct codes, which are obtainable from the doctor, dentist or specialist concerned.
- A co-payment may result in certain case, meaning that the scheme member may have to make a financial contribution for diagnosis, treatment, consultation, hospitalisation or medication. It is important to adhere to the claims procedures of your schemes to minimise co-payments.
- The largest open medical aid scheme in South Africa is the Discovery Health Medical Scheme. Other major, open medical aid companies include Bestmed, Bonitas, Fedhealth, Keyhealth, Liberty, Momentum and Sizwe Medical Fund.
Medical cover can bite a huge chunk out of your income every month. There are a few things you need to consider in choosing the medical aid that is right for you:
Do you want full cover or a hospital plan? Check your health as chronic medical conditions, are usually only covered by full medical cover. Assess your finances and weigh up whether you need full cover or whether a hospital plan would suffice.
See an independent broker as they are more objective. Check a scheme’s payment record ensure that they reliably pay out when necessary, as well as their solvency ratio, which you can obtain from any broker.
Scrutinise the table of benefits to ensure that they really provide the cover you need and find out about exclusions. Also check overall hospital limits and HIV cover.
Once you have looked at all of the above you will be in the best position to make an informed decision on medical aid scheme is the right one for you and your dependants.
This article is a compilation of the following articles listed below. We acknowledge with thanks. Source: