You should, at least, join an in-Hospital only benefit plan to cover your greatest threat of high medical costs at a very affordable premium.
We are all too aware of the high-cost of medical aid cover and for next year it is even higher. Premiums have increased by between 10 and 12% going into the next decade and it can only get worse going forward
We live in a country where medical aid is not a luxury, but a necessity.
Without medical aid, you will be in serious trouble!
There are two areas of high financial risk we face when it comes to medical expenses, private hospitalisation and dental expenses.
Private hospitalisation is non-negotiable in South Africa. Relying on the state for critical care is not recommended and if you can afford it, private care is a necessity.
The extraordinary financial pressure we are under - from a poorly performing economy and the need to pay ever-increasing costs – has resulted in people having to severely cut their spending. And unfortunately, medical aid is one of the first casualties!
Medical aid is an insurance plan to help you meet the high cost of medical treatment, so we should consider medical aid in the same way we would any long or short-term insurance cover we buy.
We don't have car insurance and because we may suffer a puncture or need an expensive service. We have car insurance for a major accident or theft.
So it should be with medical aid.
We need to ensure that we can get access to the finest private hospitalisation available when we need it.
For most people, the next area of high medical treatment is dental treatment.
Other day-to-day expenses we may face can, generally, be paid as you use them. I have yet to hear of a member going bankrupt because of a chemist account.
However, a month in ICU, then time in high care for a family, will be financially devastating without a medical aid!
Your Budget. Facing such high medical aid costs, a budget becomes vital. Allocating a figure for your medical coverage is a must!
A medical aid hospital only benefit plan costs less than a full, comprehensive medical aid.
This is because, instead of paying a monthly amount to the comprehensive plan, (that is then used to pay for your out of hospital costs), you self-pay these incidental and day-to-day expenses.
Often, the amount of the reduction (compared to a comprehensive plan), if saved, results in a greater fund for out of hospital expenses, than the funds within the medical aid! And you have full control over the savings.
You may have a concern because the medical aid does advance the savings upfront at the beginning of a year, whereas your savings take time to grow. However, over time, self-funding has greater benefits for you because:
Here's a plan is a plan that pays no annual limit private hospitalisation and essential dental costs - with a provider of your choice!
By joining this option, you are ensuring you can access the finest hospitalisation and pay for essential dental care, because the plan pays basic dental benefits, further reducing your second highest medical risk - dentistry.
The plan also offers these excellent advantages:
1. Discounted premiums
Medical aids have differing levels of in and out of hospital benefits within their plan options.
Plans pay in-hospital costs at different rates – medical aid, 200% or even 300% of medical aid rates.
Normally, this only affects private providers fees, like surgeons, anesthetists etc.. as ward and theatre fees are paid in full.
A plan paying at say medical aid rates can be substantially cheaper than one that pays at 2 times scheme rates.
However, private providers can charge what they want and often have fees up to 500% of medical aid rates!
What can you do in to meet these high fees?
You can elect to use providers linked to the medical scheme because they charge what the scheme pays, so your claims are paid in full. However, you need to find and engage their services and this is not always a simple task!
These insurance plans will pay in-hospital claim shortfalls and any procedure co-payments your medical aid may levy.
They are not that expensive.
In many cases, you can consider joining a lower level of payment plan and use the “saved” premium - over a higher level of payment plan – to fund the Top Up!
This is because the Top Up will increase your plan benefits to 500% of medical aid rates.
Better than the higher level payment plan!
Top up/Gap plans are recommended for any medical aid, whether in-hospital only or a comprehensive plan.
If you are prepared to use listed hospitals (outside of emergencies) and networks of out of hospital service providers, you get premium discounts!
Medical aids can influence costs through these networks and any saving is passed onto the member in the form of reduced contributions.
This fund is made up of additional monthly contributions you pay. It is your money!
If you are healthy or can self-pay some of your day-to-day costs, you can join a plan with a reduced savings fund as the contributions are less.
The only concern, is whether you have “cash-on-hand” to pay for services when you need them and your savings are used.
Medical aids increase your contribution by a monthly amount and allocate it to your savings fund, irrespective of whether you use those savings or not!
This scheme allows you to repay the savings you use, but, only from the time you need them!
In this way, your premium will stay at a reduced amount until you use the savings account when your premium increases by a savings payback amount.
If you never use the savings, you effectively have an in-hospital benefit only plan, but with the safety of being able to access monies should you need them.
What a great idea!
5. More expensive medical plans offer a threshold benefit.
When the day-to-day savings account is used and claims have accumulated to a predetermined amount, this threshold benefit pays for further day-to-day claims that year.
Make no mistake, this benefit is expensive!
In many cases, members do not use the threshold benefit in a year of coverage as they do not accumulate sufficient claims to qualify for the benefit or if they do, they access the benefit towards the end of the year and so make very little use of it.
It is a waste of money.
You need to analyse your annual out of hospital medical costs and any potential need for cover in the following year, to justify the need for buying threshold cover.
It may well be that you are better off saving that threshold premium in your own savings fund. Or simply reducing your overall premium?
We can assist you with this.
PMB benefits, as enforced by the Medical Schemes Act, cover 27 illnesses.
These are chronic medicines every scheme must pay for and the schemes can dictate where you source these medicines.
Medication for chronic illnesses that fall outside of the PMB benefit is covered through more expensive plans.
One plan offers premium discounts depending upon where you source your chronic medicine.
With no chronic medicine need, the discount can be significant!
A young, healthy member generally only needs an in-hospital medical aid option.
Leading more active lives, they are at higher risk of accidents that require casualty or hospitalisation.
The occasional visit to a GP or dentist can be self-funded.
Most younger members begin with a hospital plan, changing to higher cover plans as they grow older and start a family.
Maternity benefits are paramount if you are starting a family.
Medical aids allow you to upgrade plans once a year.
However, there is a scheme that allows you to upgrade your plan at any time you suffer from a life-changing event and pregnancy is one such event!
With this scheme, you can join a lower level of benefit fund, safe in the knowledge that should you need higher cover for a qualifying event, you can change plans at any time.
When you are planning a family, your day-to-day expenses will rise and a plan offering help with these costs may be an option.
There are a wide variety of hospital plans with built-in day-to-day saving funds, to help pay for out of hospital costs.
Part of your premium funds this benefit.
Although the money is yours, you can only use it for medical expenses as defined by your plan.
In this way, there is no undue loss of savings and unused year-end balance is transferred to the next year.
Some plans have a limited safety net when savings are used.
You can use the services of network providers and the scheme pays for them.
If you have a threat of high out of hospital needs, then you should consider a comprehensive plan.
For the more mature member, who may not have high chronic or general health concerns, you can consider a hospital plan with a savings account.
You will have the best hospital cover and protection should you require help with increased day-to-day expenses.
If you do need regular medical services, then a comprehensive plan is recommended.
We do not promote hospital plan insurance! Medical aid and insurance plans are very different products.
Please see our comments on these differences here.
The hospital and dental benefit plan will offer you the finest any private hospital cover and essential dental expenses cover and at a very affordable premium - way less than any other medical aid!
Day-to-day benefits are generally paid from your own savings fund in a medical aid.
Although this is your money, you cannot do anything with the funds, except payout of hospital costs through the medical aid.
And you can only access the balance 6-months after leaving your medical aid. Not ideal!
This idea is to buy an in-hospital only medical aid.
Then to add a savings account, that you only use for medical costs, creating your fund for day-to-day medical costs.
The combined premiums are CONSIDERABLY less than a comprehensive medical aid with mostly equivalent benefits.
And YOU control your savings account!
It can be a complicated exercise to work out whether you should change your medical aid plan.
You need to weigh-up your health risk against the various plan benefits, then try to find a plan that best suits your needs and budget.
Please remember that a good hospital plan will cover your area of greatest medical financial risk and given the certainty of rising prices with health care this is fast becoming the plan option of choice!
We are here to help you, often at no cost, every step of the way!
Last update July 29, 2020
Medical Aid Authority Peter Pyburn.
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