The truth about your MED­I­CAL SCHEME

Fairlady - - HEALTH - By Anna Rich

Your med­i­cal scheme is mak­ing killer prof­its.

WRONG

Let’s take a look at Dis­cov­ery, South Africa’s largest med­i­cal scheme, with more than 2.7 million ben­e­fi­cia­ries at the end of 2016. If you read the busi­ness news reg­u­larly, you’ll know that the prof­its of Dis­cov­ery Health (Pty) Ltd run into the bil­lions.

But wait a sec­ond, that’s not the med­i­cal scheme, that’s the fi­nan­cial ser­vices provider. It’s all a bit con­fus­ing, isn’t it? The thing is, med­i­cal schemes are not for profit. Some do their ad­min­is­tra­tion them­selves, while oth­ers out­source it. Be­sides Dis­cov­ery Health, other com­pa­nies that ad­min­is­ter med­i­cal schemes but are sep­a­rate from them in­clude Metropoli­tan Health Cor­po­rate, Med­scheme Hold­ings and Mo­men­tum Med­i­cal Scheme Ad­min­is­tra­tors.

Med­i­cal schemes are, how­ever, re­quired by law to be ‘fi­nan­cially sound’. This means they have to be able to hon­our the ben­e­fits they of­fer mem­bers, which are laid out in their rules. (Did you ever read those? You should have been given a free copy de­tail­ing your rights and obli­ga­tions when you joined.)

The schemes are tightly reg­u­lated by the Med­i­cal Schemes Act and must reg­is­ter with the Coun­cil for Med­i­cal Schemes (CMS), which pro­tects ben­e­fi­cia­ries and tries to en­sure that the schemes are ac­ces­si­ble and fairly man­aged. Ac­cord­ing to the Act, schemes have to have funds of at least 25% of gross an­nual con­tri­bu­tions in re­serve, and this is mon­i­tored by the CMS.

You’re pay­ing in more than you get out.

MAYBE

In 2015, the av­er­age amount spent on con­tri­bu­tions per adult ben­e­fi­ciary per month was R1439,80. About

37,1% of that was spent on hos­pi­tal ex­penses. In con­trast, the monthly health­care spend by the schemes was R1319,20. Even if you feel you’re get­ting a raw deal, just one short hos­pi­tal stay will make it worth­while.

You can save if you join a med­i­cal scheme only when you need it.

WRONG

You could join when you know you’ll need med­i­cal cover – such as when you’re plan­ning a preg­nancy or need an oper­a­tion – but that goes against one of the func­tions of med­i­cal schemes: mem­bers cross-sub­sidise one an­other. When you’re healthy (usu­ally when you’re younger), your con­tri­bu­tions off­set the in­creased med­i­cal ex­penses of less healthy fel­low mem­bers – but, some day, some­one else will be off­set­ting your ex­penses.

Al­though the Med­i­cal Schemes Act doesn’t com­pel ev­ery­one to be­long to a med­i­cal scheme, it does al­low schemes to pe­nalise you if you aren’t in from the get-go. Wait­ing pe­ri­ods can be ap­plied, which means you pay con­tri­bu­tions with­out be­ing able to claim any ben­e­fits. If you haven’t been a mem­ber of any scheme in the 90 days lead­ing up to your ap­pli­ca­tion, you and your de­pen­dants will have to wait for three months be­fore you can make a claim. If you have a spe­cific med­i­cal con­di­tion, in­clud­ing preg­nancy, you’ll have to wait for 12 months be­fore you can sub­mit any claims re­lat­ing to it.

These wait­ing pe­ri­ods even ap­ply to con­di­tions on the Pre­scribed Min­i­mum Ben­e­fits (PMB) list, though the scheme might waive this for child­birth it­self. (We’ll get to PMB later.)

If you were pre­vi­ously a mem­ber of a scheme, there are still wait­ing pe­ri­ods de­pend­ing on the du­ra­tion of your mem­ber­ship, but to a lesser de­gree than if you were never a mem­ber. If you change schemes be­cause you’ve changed jobs, you won’t be sub­jected to wait­ing pe­ri­ods.

If you still reckon you’d be will­ing to roll with the wait­ing pe­ri­ods, then per­haps you’ll be less keen on opt­ing out of mem­ber­ship in the light of late-joiner penal­ties. If you de­cide to join a scheme for the first time when you’re older than 35, you’ll have an on­go­ing penalty slapped onto your monthly con­tri­bu­tion. The amount is de­ter­mined by a for­mula, which takes your age above 35 and any years of mem­ber­ship into ac­count. Let’s say you de­cide to join at 40 and you’ve never been part of any med­i­cal scheme, your sur­charge will be 25% of the usual con­tri­bu­tion. The older you get, and the less time you’ve been with a med­i­cal scheme, the greater the per­cent­age. Did you spend time out of the coun­try? Per­haps you had med­i­cal in­sur­ance? Sorry, but that doesn’t count. Only mem­ber­ship of a med­i­cal scheme in SA off­sets the late-joiner penalty.

When you ap­ply for mem­ber­ship you can be re­fused if you’re older or un­healthy.

WRONG

Med­i­cal schemes are legally obliged to ac­cept you – open en­rol­ment is writ­ten into the Act. This is for open schemes, of course. Re­stricted schemes are for spe­cific groups of em­ploy­ees or pro­fes­sion­als; for ex­am­ple, GEMS is for govern­ment em­ploy­ees only and Profmed is for pro­fes­sion­als who meet the el­i­gi­bil­ity cri­te­ria, one of which is a qual­i­fi­ca­tion of four years or more.

Age, gen­der, cur­rent or past ill health, and the fre­quency of health­care have no ef­fect on your ap­pli­ca­tion. Those fac­tors don’t af­fect the con­tri­bu­tion you pay ei­ther. It’s noth­ing like in­sur­ance cover, where you are rated based on your risk fac­tors and your premium is loaded ac­cord­ingly. The only things that af­fect your med­i­cal scheme are the num­ber of de­pen­dants, and pos­si­bly your in­come. Chil­dren or adult de­pen­dants may be charged less than the prin­ci­pal mem­ber.

There are a few con­di­tions, though: your mem­ber­ship could be re­fused or can­celled if you fail to dis­close rel­e­vant in­for­ma­tion about your or your de­pen­dants’ health; if you don’t pay your con­tri­bu­tions within the time al­lowed in the med­i­cal scheme’s rules; or if you sub­mit fraud­u­lent claims.

Your em­ployer has no right to make mem­ber­ship of a med­i­cal scheme com­pul­sory.

WRONG

As part of the con­di­tions of your em­ploy­ment, your em­ployer can dic­tate that you be­long to a spe­cific med­i­cal scheme. The only way out is usu­ally if you’re an adult de­pen­dant on your part­ner’s scheme.

If you get can­cer, your scheme should cover all your treat­ment costs.

MAYBE NOT

In a case brought to the CMS, a woman di­ag­nosed with can­cer needed an an­ti­body, Her­ceptin, to treat it. A year’s sup­ply would cost more than R550000, but the rules of her med­i­cal scheme lim­ited fund­ing to R200000. The case turned into a bat­tle through the CMS, which ini­tially agreed with the med­i­cal scheme but then agreed with the woman on ap­peal, be­fore once again agree­ing with the scheme on fi­nal ap­peal.

This is the way it usu­ally goes, which is a bit­ter pill to swal­low if you or some­one you love gets can­cer. But the lim­its to ben­e­fits are set out in the rules and the scheme has to main­tain its abil­ity to cover as many mem­bers as pos­si­ble. So scru­ti­nise those rules.

The only med­i­cal ex­penses cov­ered on a hos­pi­tal plan are those you run up when you’re ac­tu­ally in hos­pi­tal.

WRONG

Med­i­cal schemes are obliged to cover any emergency med­i­cal con­di­tion, a spe­cific set of about 270 con­di­tions called the Di­ag­no­sis and Treat­ment Pairs (DTPs), and the 27 con­di­tions on the Chronic Dis­ease list – on ev­ery

ben­e­fit op­tion. These are called the Pre­scribed Min­i­mum Ben­e­fits (PMB) and their di­ag­no­sis and treat­ment must be funded in full. Yet, ac­cord­ing to its most re­cent an­nual re­port, the CMS re­solved 1050 com­plaints con­cern­ing short-pay­ment of PMB ac­counts and 322 non-pay­ments. The only ex­cep­tions to the obli­ga­tion are when you choose not to use a des­ig­nated ser­vice provider (DSP), use med­i­ca­tion that isn’t on the for­mu­lary, fail to get pre-autho­ri­sa­tion or ap­ply the treat­ment pro­to­cols set out in the scheme rules.

If you used a non-DSP for your PMB be­cause you had no choice – per­haps the DSP was unavail­able or too far away when you needed ur­gent treat­ment – your med­i­cal scheme is obliged to pay in full.

Ex­am­ples of chronic dis­eases on the list in­clude hy­per­ten­sion, type 1 and type 2 diabetes, asthma, bipo­lar mood dis­or­der, HIV, hy­pothy­roidism, rheuma­toid arthri­tis and coro­nary artery dis­ease. The DTPs in­clude preg­nancy, which is the most ex­pen­sive. Treat­able breast can­cer and pneu­mo­nia also fall into this cat­e­gory.

Co-pay­ments on a PMB can come out of your med­i­cal sav­ings ac­count.

WRONG

This is specif­i­cally dis­al­lowed by the Act. The idea be­hind co-pay­ments is to re­duce fraud­u­lent or un­nec­es­sary claims – which push up con­tri­bu­tions.

Med­i­ca­tion for any chronic con­di­tion, such as high blood pres­sure or diabetes, is paid out of your sav­ings.

WRONG

Your med­i­cal sav­ings ac­count is for health ser­vices that don’t fall into the cat­e­gory of PMBs.

If you don’t use all your sav­ings, you can get the cash back.

WRONG

At the end of each fi­nan­cial year, what­ever you have left in your med­i­cal sav­ings ac­count goes to­wards your ex­penses the next year.

If you change med­i­cal schemes or op­tions, your sav­ings funds are trans­ferred to the new one. If you switch to a scheme with­out a sav­ings ac­count or you don’t join an­other scheme, your sav­ings will be paid out to you but they could be taxed.

Health­care providers al­ways charge more than your med­i­cal scheme cov­ers.

SOME DO SOME DON’T

The CMS pub­lishes the Na­tional Health Ref­er­ence Price List to guide schemes and ser­vice providers on ap­pro­pri­ate charges. Some health­care providers charge med­i­cal scheme rates, so their ac­count will be set­tled in full.

How­ever, pri­vate health­care isn’t sub­ject to price reg­u­la­tion – the price list is just a guide – so health­care providers can, and of­ten do, charge amounts far in ex­cess of the med­i­cal scheme rates, and you’ll have to pay the dif­fer­ence. If you’re feel­ing the pinch, you’ll save a mint by seek­ing out health­care providers that stick to the scheme rates.

You can change op­tions only at the be­gin­ning of the year.

GEN­ER­ALLY TRUE

Your med­i­cal scheme can rule that you can change your ben­e­fit op­tion only at the be­gin­ning of each year af­ter giv­ing three months’ no­tice. But if you’re strug­gling to pay your con­tri­bu­tions and want to drop to a re­duced ben­e­fit op­tion, find out if this rule ap­plies.

For free med­i­cal care, just show up at an emergency unit.

TRUE

(if it really is an emergency) De­spite the hos­pi­tal’s at­tempts to check whether you’re ‘good’ for pay­ment while you’re in ana­phy­lac­tic shock, it is obliged to treat you whether you can pay or not. So what counts as an emergency? Here’s the acid test: if you aren’t treated there and then, it would re­sult in death, or dam­age or dys­func­tion of an or­gan or part of the body. If it’s not an emergency, your scheme doesn’t have to pay.

If your med­i­cal scheme re­fuses to pay a claim, there’s noth­ing you can do about it.

WRONG

You can query it, un­less you’ve been tardy. If you sub­mit an ac­count for med­i­cal ex­penses af­ter four months, it won’t be paid. For other dis­putes, you can lodge a com­plaint with your scheme. If you’re not happy with the out­come, you can take your com­plaint to the CMS. Visit www.med­i­calschemes.com/Con­tent. aspx?110 to find out how.

Med ClaimAs­sist looks into whether med­i­cal-aid non-pay­ment is le­git­i­mate or not, for a flat fee of R349 plus VAT. Go to med­claimas­sist.co.za for more in­for­ma­tion.

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