11 March 2015

What to look out for when choosing a medical scheme

Are your health insurance costs too high? Try decoding your medical aid terms and conditions and associated costs to make sure that it works for you.


“While health insurance is important, it comes at a cost that is rapidly rising. Unfortunately for the consumer, this affects medical scheme membership contribution rates, and the increases of which are sometimes significantly higher than general inflation.

As schemes try to contain their costs in the face of increasing claims, they make changes to their plans and benefits, which can come as a surprise to the consumer,” says Mark Payne, CEO of the Independent Community Pharmacy Association (ICPA).

Annual review of your plan

He recommends that an annual review of your plan is absolutely vital, and will affirm that it is serving your needs rather than the other way around.

The ICPA advises on several important things you should look at when considering a new medical scheme or reviewing your current one:

Administration – Know who the administrator is and if they have a good track record in client services and processing claims. Ask your broker for assistance or visit the Council for Medical Schemes website for more information – including notifications of current consumer awareness campaigns.

Read: Syndicates taking medical schemes for a ride in South Africa

Coverage – "Coverage varies from one scheme to the next, and can of course change on an annual basis," advises Payne.  Most schemes pay claims, depending on the benefit option, at between 100% to 300% of their own Medical Scheme Rate which is created using the National Health Reference Price List (NHRPL) as a guideline. Therefore, it is imperative to negotiate rates with your Health Care Professional (HCP), whether it be an anaesthetist, specialist, GP etc. prior to treatment. Find out if the doctor charges Medical Scheme Rates (MSR).  If they charge above MSR, and the procedure was a non-emergency, you may be liable for the difference in costs between the HCP charges and the MSR.

Another option is to take out gap cover, an additional product to cover the shortfall. The ICPA advises that patients  should also ask their HCP about Prescribed Minimum Benefits (PMB)*, as even on a hospital plan you are still covered for PMB’s and certain medicines and other services used to treat the chronic condition.

Exclusions – Exclusions are as important in terms of what is actually covered, and this can change from year to year.  ICPA recommends that you take note of all exclusions in the product brochure to ensure that there will be no surprises.

Co-payments – Many schemes apply co-payments that you must cover from your own pocket – for example on elective procedures such as joint replacements. Co-payments differ from scheme to scheme and also depend on whether the procedure is done in or out of hospital.

Preferred Provider Networks – Medical Schemes are increasingly introducing service provider networks to contain costs. This can take the form of a pharmacy, GP, specialist or hospital network, amongst others. Members should make the decision regarding their non-contracted service provider, which often removes choice from the member where they already have existing relationships with their GP or pharmacist, and where service excellence is guaranteed.

“Courier Pharmacy, applicable to your chronic medication, is one avenue which has lost this face to face personalised service,” says Payne.

“If you choose to remain with your HCP of choice and they are not contracted to the service provider network, you are often lumped either with a penalty co-payment or have to pay the difference between what your HCP charges and what the medical aid is prepared to pay. Most independent community pharmacies are contracted to the majority of schemes, and, if you can, buy into a benefit option which does not restrict access to health care in terms of unnecessary co-payments or provide limitations.”   

ICPA further suggest that you choose a medical professional who takes an active interest in your wellbeing and who can also advise you on alternative treatment and affordable care.

Chronic medication and Designated Service Providers (DSPs)ICPA warns that chronic medication is an area which requires special attention. Schemes can implement preferred providers when it comes to chronic medication. This essentially means that the medical scheme member is obliged to receive their medication from the medical scheme’s appointed service provider or face a penalty co-payment. This can apply to chronic medication from the first rand or once you have exceeded your chronic medicine benefit limit, if your medicine is still paid as a PMB.   

“Imagine having to switch from your community pharmacy to a non-descript courier pharmacy half way through the year because you have exceeded your chronic benefit limit. It just does not make practical sense,” says Payne.  “For patients dealing with chronic conditions, this is yet another blow, as they will no longer be able to get their medicines from their local or preferred pharmacist, with whom they have built a relationship.”

Read: 21 ways to cut your medical costs

The ICPA says that when looking at schemes, always check that chronic medicine is covered on the option you want to join. Make 100% sure that your condition is regarded as a chronic condition and then that the medication you use is also covered. Lastly, double check whether you can choose your own pharmacist or the scheme requires you to receive your medicines from another “Preferred Provider”.

A scenario may exist whereby a scheme can cover your condition per se, but when it comes to the medication, the scheme has indicated that it is not on their formulary list and is not covered, or covered up to a benchmark price. You may then be requested to use an alternative, or incur a penalty co-payment for non-formulary use. It is the responsibility of the GP or pharmacist to have the discussion with you and advise on alternatives. Ensure that you are compliant by taking your medicines according to the directions provided.

ICPA advise that if you are diagnosed with a chronic condition, you may be provided with a Treatment Plan which covers various forms of treatment, for example GP visits and pathology test. “Use these benefits, as they are designed to keep you healthy and manage your condition optimally.”

Know your rights - Members are entitled to copies of the scheme's rules, financial statements, and annual reports upon request, and upon admission to membership, medical schemes are obliged to furnish members with a summary of the registered rules which comprise the scheme's and members' rights and obligations, all benefit options and relevant contributions.

It is also important to read all disclaimers. Medical schemes usually provide you with an authorisation letter, but this would be subject to available benefits and is not proof that the procedure will be paid for in full.

Consumer Accountability – ICPA strongly advises that anyone who contributes to a Medical Scheme empowers themselves and obtains independent advice that enables informed decisions to be made regarding their choice of medical scheme. It is also important to negotiate with HCPs regarding their costs and to drive the co-ordination of your own medical care.  “This is an area of your life that, along with your finances, should be continually monitored,” concludes Payne.

Read: Medical scheme dependants: who qualifies?

A website worth visiting is the Medical Schemes Information Tool or MSIT. Here you can compare schemes, options and it provides the solvency rates of all the various medical schemes. They will even provide a comparative quotation scheme versus scheme.

Read More:

25 conditions your scheme must cover

How to make your savings account stretch

20 claims medical schemes don’t have to pay for

Image: Phonendoscope, medical records and books from Shutterstock


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