Medical aid a case of Hobson’s choice
Choosing a medical aid plan can be daunting, with 87 registered medical schemes offering hundreds of options and no way to reliably compare them.
What makes matters worse is the fact that money is tight and medical aid providers constantly raise premiums at more than the inflation rate every year.
“If you give consumers more than 102 plans to choose from, they will make a mistake,” says Jill Larkan, head of healthcare consulting at GTC (formerly Grant Thornton Capital).
GTC released its medical aid survey this week, which analysed the different plans offered by each open medical scheme in terms of the cost and cover offered.
Community Medical Aid, Medimed, Selfmed and Thebemed were not included in the survey as they had not updated their benefits and rates for this year at the time the survey was conducted. KeyHealth was also excluded.
This showed that, despite being the country’s largest open medical scheme, Discovery only had one plan that offered value for money and this restricted members to a contracted network of hospitals.
The proliferation of medical gap cover – which is now offered by blue chips like Sanlam, Old Mutual and Liberty – after the National Treasury published rules regulating its provisions last year, prompted GTC to dispense of its practice to standardise in-hospital benefits by assuming all plans had 500% cover for hospital expenses.
Some schemes only cover 100% of their tariffs for hospitals. Members must cover the shortfall if doctors and specialists charge more than the schemes’ rates.
Some members have made up for this by buying gap cover products to cover the shortfall.
The Council for Medical Schemes has previously said this has posed a “serious” threat to medical scheme risk pools and government’s proposed National Health Insurance programme.
But Larkan believes gap cover is “absolutely necessary” as members might be faced with the impossible choice of needing to see a specialist other than those named on the scheme’s network.
Schemes are feeling undermined because some members have opted to join plans that offer a 100% scheme tariff for in-hospital costs, which are cheaper than their 200% or even 500% equivalents, and have bought gap cover for any future shortfalls.
The survey did not analyse Prescribed Minimum Benefits (PMB) or chronic-illness cover, which GTC assumed was paid from the risk pool, while acknowledging that the level of coverage differs across plan types.
The Council for Medical Schemes said PMB benefit payouts accounted for 53% of payouts from scheme risk pools in the 2013 financial year.
Hypertension, hyperlipidaemia, diabetes mellitus type 2 and asthma were the most prevalent chronic conditions covered by PMBs.
City Press has evaluated cover for medication and equipment needed to treat these conditions across the preferred and second-best plans identified by GTC (
This showed that more expensive plans did not necessarily provide greater cover for chronic medication. Some, like Fedhealth’s Maxima Basis plan, use restricted formularies.
Some medical schemes do not publish their formularies – or lists of chronic medication and equipment they cover – and did not respond to requests for these.