The world of medical schemes is a complicated one – and there are many myths and misconceptions doing the rounds. Below is the truth about some of these.
Myth: Medical schemes make a profit.
Fact: Medical schemes as such are not profit-making organisations. They might be part of bigger insurance companies, which do make a profit, but there are different laws governing insurance products and medical schemes. If a scheme registers a profit, it goes into the reserves of the scheme, and this belongs to the members. Medical schemes have trustees, not shareholders. Of the registered open medical schemes in SA, only 8 of the 23 achieved an operating surplus in 2015.
Myth: A scheme can refuse my application.
Fact. No it cannot. A scheme can make you pay a late-joiner penalty, and impose a general waiting period of three months or a condition-specific waiting period of no more than 12 months on a new member. But it cannot refuse your application if you can pay the membership contribution.
Myth: Medical inflation is higher in SA than elsewhere.
Fact: Medical inflation is a worldwide phenomenon. In SA, medical inflation, on average, has been 2% above CPI inflation over the last 16 years. High equipment and medication costs, the spiralling costs of private healthcare, overtreatment in the private sector, and the increase in lifestyle-related diseases all contribute to high medical inflation worldwide.
Myth: Medical insurance is the same as a medical scheme.
Fact: Medical insurance is not covered by the Medical Schemes Act, and functions more like an income-replacement product than medical cover. A medical insurance product pays you out for certain diagnoses, or a hospital stay – it does not pay your medical bills.
Myth: If my scheme gives 100% cover means I don’t have to pay in anything.
Fact: Not true. Schemes can cover you for 100% of the medical fund tariff, which may be considerably lower than the cost of the private hospital or private doctor. You could end up with a big co-payment.
Myth: A scheme can force me to use network hospitals.
Fact: No, it can’t. It can encourage you to do so by guaranteeing no co-payments from your pocket if you stay within the network. If you choose to use out-of-network hospitals or doctors (except in certain emergencies), the scheme can make you pay the difference, but they can’t force you to use certain healthcare services.
Myth: Pensioners pay a lower membership contribution.
Fact: No, that is not allowed. In many other spheres of life pensioners get a discount, but not for medical scheme contributions. In fact, it is illegal to let pensioners pay less. Traditionally pensioners are also high claimers on most medical schemes.
Myth: My employer has to subsidise my scheme contributions.
Fact: No, they don’t. The employer can, as part of your employment contract, require you to belong to a certain scheme, but they do not have to subsidise your contributions. If you work for the state, you might be lucky in getting a third of your contribution subsidised, but it is a privilege, not a right.
Myth: I cannot put my parents on my medical scheme.
Fact: If they are financially dependent on you, and you can prove it, they can join as adult dependants on your scheme.
Myth: A scheme can tell me which medication to use.
Fact: They can encourage you to use the medication on their medicines formulary. If you choose not to, you might have to pay the difference in cost, but they cannot force you to take a particular type of medication.
Myth: A scheme can exclude me from treatment for a pre-existing condition forever.
Fact: No, they can’t. They can only impose a 12-month waiting period for a pre-existing condition. If however, they find out that you did not disclose a pre-existing condition, you can be found guilty of fraudulent behaviour, and there might be penalties imposed because of that.
Myth: A hospital plan will only pay for in-hospital treatment.
Fact: Generally, yes, but all hospital plans also have to pay for the treatment of 25 chronic conditions. You might also be entitled to claiming for six-monthly GP visits to have your chronic prescriptions renewed.
Myth: I can change options whenever it suits me.
Fact. You can usually only switch options once a year in January on most schemes. This is done to streamline administration of things such as savings accounts, which are allocated on an annual basis. Nothing stops you from changing options every year.
Myth: A medical scheme cannot terminate my membership.
Fact: They can, if you are unable to pay the monthly contributions, or if you are found guilty of making fraudulent claims.
Myth: Complications from elective surgery are for my own account.
Fact: If you have cosmetic surgery, for which the medical scheme will not pay, and you get septicaemia after the operation, they will pay for the treatment of the infection, as that is a prescribed minimum benefit.
Myth: Once my benefits run out, that’s it for the year.
Fact: Even if your savings account is depleted, you are still covered for in-hospital treatment. You can also apply to your scheme for further ex-gratia payments for day-to-day treatment. These are evaluated on a case-by-case basis, according to certain protocols.
Myth: All cancer treatment is a prescribed minimum benefit.
Fact: Some cancers are PMBs, but certain cancers, when advanced, are not deemed treatable. Depending on your scheme, you can still claim for these from your oncology benefit, though. After this, many schemes will expect you to pay a portion of your treatment yourself – this depends on your scheme and the option you have chosen.
Myth: I cannot claim anything during the three-month waiting period.
Fact: You couldn’t buy a new pair of spectacles, but if you were in an accident, you could definitely get treatment at the nearest trauma unit.
Myth: Schemes take forever to settle claims, especially big ones.
Fact: The scheme has 30 days from receipt of the claim (with all the relevant information) to settle it. The only delays will be if there is information missing. You usually have until the end of the fourth month from the last date of your treatment to hand in claims. If schemes regularly miss the 30-day payment schedule, they are called to account by the Council for Medical Schemes.
Myth: The money in the savings account is yours.
Fact: It is yours in that it can only be used by you to pay for your medical expenses. But you cannot draw the money out in cash, or use it to settle the bill for co-payments. This money is carried over from year to year if you do not use the full allocation. It will only be paid out to you four months after you have left the scheme.
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(Sources: The Council for Medical Schemes; Alexander Forbes Health)