INSURANCE: Important Considerations Before You Change Your Medical Aid Cover
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BEFORE making any change to your healthcare cover, it is crucial to thoroughly investigate and compare your options and benefits to ensure that you are not financially compromised by any change.
According to Gavin Griffin, of Aon Employee Benefits the key is to thoroughly review the benefit richness of a medical scheme option. “Typically, medical schemes can be complex and it can be difficult to understand how to compare benefit options which vary so widely; making like-for-like comparisons tricky at best. It’s a task best undertaken with the guidance and advice of a professional broker who can do a thorough needs analysis; review your claims history and map this back to your budget. Based on this information, your healthcare broker can advise on the best plan to ensure that your healthcare needs are comprehensively covered and that any change won’t leave you compromised or facing hefty out of pocket expenses that you cannot afford,” explains Gavin.
“In reviewing your medical scheme cover, where costs and benefits on a medical scheme are of concern, you could consider moving to a lower benefit option within the same medical scheme. By doing so, you can avoid waiting periods that are typically associated with a complete change in medical scheme provider,” explains Gavin.
“You furthermore, have the opportunity to either, buy-up within the medical scheme to acquire better benefits if your claims history demands it, or to buy-down with the purpose of securing lower monthly contributions. Most medical schemes only allow a buy-up at the beginning of a benefit period – which means changes will need to be made in December to be effective in January, but would allow a buy-down at any time of the year. Some schemes would allow a change during the year as a result of a ‘life changing event’, such as an addition to the family,” Gavin adds.
When comparing healthcare and benefit options
Never change to another medical scheme or benefit option simply because the contribution is lower than your current option. You need to compare the actual benefits, exclusions, value adds and service delivery, along with your specific healthcare needs, such as any chronic conditions and the medication you require. Weigh up the cost of different types of cover against the benefits provided – for example a more basic medical scheme might only cover health care costs related to hospitalisation and Oncology only, while day-to-day costs of General Practitioner visits, Optometry and Dentistry for instance would be for your own cost.
Comprehensive cover may include dental and eye care, physio and even ‘natural’ or homeopathic therapies subject to certain limits.
100% cover means you’re fully covered right? This is not the case. Specialists and in-hospital charges can be up to 400% of the benefits offered by medical scheme. So if your medical scheme only pays out at 100% of tariff, you will be liable for the shortfall or remaining 300% out of your pocket. This can amount to thousands of Rands and leave you in a serious financial predicament.
Gap cover policies for medical scheme shortfalls are proving to be invaluable safety nets by covering certain in-hospital and Specialist shortfalls that may occur, at a relatively inexpensive monthly family premium.
Many consumers are opting for more affordable hospital cover plans only, and then topping up cover with this gap insurance to address any shortfalls that may arise. They then also take on the risk of having to fund any day-to-day expenses for General Practitioner visits, Dentistry, Optometry and so on from their own pocket. An analysis of your claims history and state of your health and your dependants will be important in assessing whether such an option will work for you.
Out of hospital or day-to-day limits vary dramatically between medical schemes and benefit options. If your medical savings limits are low, but you have regular visits to the doctor for certain conditions, you could find that two or three consultations with a Specialist will quickly deplete your funds, leaving you to fund any further costs from your pocket, or at least until your self-payment gap, if applicable, has been reached, which could be a few thousand Rand.
Certain medical schemes limit hospital pay-outs to a certain amount per family per year. If more than one family member requires hospitalisation in the same year, you could face considerable financial stress.
Exclusions and waiting periods may apply – joining a new medical scheme, certain waiting periods or exclusions may be applied – these could be from a three months general waiting period up to 12 months condition specific waiting period for certain conditions.
Designated provider network – many benefit options require that you make use of practitioners and Hospitals designated by the medical scheme as they provide medical services at a fixed rate negotiated with the medical scheme. If you make use of a specialist or provider not on the list, for whatever reason, you could face significant co-payments, or in some instances, forfeiture of any cover.
Only after considering your claims history; state of health; and level of cover required by you and your dependants; as well as what level of self-funding you are able, or willing to bear; can you make an informed choice. It’s a role best undertaken with the guidance and advice of a professional healthcare broker who can do a thorough needs analysis and then investigate the benefits options provided by a reputable medical scheme to meet your needs and budget,” concludes Gavin.
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