Get­ting the most out of your med­i­cal aid

This pro­nounce­ment should be a warn­ing to South African con­sumers to start think­ing more in­tel­li­gently about their ap­proach to their over­all health and well-be­ing, and how they should en­gage with their med­i­cal in­surer go­ing for­ward. The Fin­week Team inves

Finweek English Edition - - COVER STORY -

Adrian Gore, Dis­cov­ery Hold­ings chief ex­ec­u­tive of­fi­cer, states: “MORE THAN 50% OF ALL DEATHS WORLD­WIDE ARE DUE TO DIS­EASES OF LIFE­STYLE CAUSED BY POOR HU­MAN BE­HAV­IOUR...”

Af­ford­able health­care in de­vel­oped economies has be­come such an emo­tive and crit­i­cal topic to be de­bated and un­der­stood that it has even brought the US gov­ern­ment to a stand­still as it de­bates the vi­a­bil­ity of ‘ Oba­macare’.

As Devlin Ross, se­nior health­care ad­min­is­tra­tor, Char­tered Em­ployee Ben­e­fits, points out: “Med­i­cal aids are a grudge pur­chase for South Africans. Costs are sub­stan­tially higher com­pared to the rest of the f irst world – where you don’t have to be­long to a med­i­cal scheme to ac­cess qual­ity or af­ford­able health­care – and to add to fur­ther feel­ings of frus­tra­tion, most South Afri- can med­i­cal schemes are set to re­lease their 2014 con­tri­bu­tion in­creases in the up­com­ing months.”

The chal­lenge that most con­sumers face is that apart from the in­creases, which out­strip inf la­tion by a sig­nif­i­cant level, the prac­tice of bundling in ‘ ben­e­fits’ means that con­sumers bat­tle to shop smartly and ex­tract value from their med­i­cal insurance.

Take for i nstance t he re­cent an­nounce­ment from Lib­erty Med­i­cal Schemes. Lib­erty in­di­cated that med­i­cal scheme in­creases would be lim­ited to 9.5% in 2014. “Lib­erty Med­i­cal Scheme has man­aged to keep in­creases low, while im­prov­ing ben­e­fits by 7%

and in­creas­ing the an­nual lim­its across all op­tions,” trum­peted the press re­lease.

While there were some mean­ing­ful ben­e­fit en­hance­ments, such as the cost of har­vest­ing or­gans in a pri­vate set­ting to be cov­ered (handy if you’re dead), and an in­crease in the num­ber of GP vis­its from a max­i­mum of nine to 15 per fam­ily and six per ben­e­fi­ciary on the Tra­di­tional Stan­dard op­tion, the real kicker be­ing of­fered by Lib­erty Health, as Lib­erty Med­i­cal Scheme’s ad­min­is­tra­tor, is free un­capped high-speed ADSL data for one year on its Own your life Re­wards pro­gramme for its mem­bers, which is worth R3 540.

This is not an at­tempt to knock Lib­erty – who, un­like many other ma­jor schemes, ac­tu­ally en­sure that their sol­vency lev­els of the un­der­ly­ing funds stay above the 25% stip­u­lated by the Coun­cil of Med­i­cal Schemes – but there is an irony in con­sumers be­ing re­warded by spend­ing more time plugged into the In­ter­net as part of an ‘own your life’ of­fer­ing. Will you ac­tu­ally go through the has­sle of chang­ing your med­i­cal of­fer­ing sim­ply to score cheaper In­ter­net? Lib­erty ac­tu­ally makes it very clear in the press re­lease that this is not a ben­e­fit to the con­sumer, but rather an at­tempt to re­duce ad­min­is­tra­tion costs from its side by mov­ing to elec­tronic com­mu­ni­ca­tion.

Vic­tor Crouser, coastal head of health for Alexan­der Forbes, told

Fin­week: “Med­i­cal aid is be­com­ing an in­creas­ingly ex­pen­sive item in the av­er­age house­hold. With most schemes an­nounc­ing in­creases in the re­gion of 7% to 10% so far this year, that trend is set to con­tinue. While schemes of­fer many ar­gu­ments about why in­creases are above nor­mal inf la­tion, the fact re­mains that for the con­sumer, th­ese in­crease are con­tin­u­ously plac­ing ad­di­tional bur­den on their house­hold bud­get.”

With med­i­cal insurance be­ing a ma­jor part of your per­sonal fi­nances, here are some ideas from the ex­perts around man­ag­ing your insurance:

SHOULD YOU BUY SHORT­TERM HEALTH INSURANCE?

While only 16% of the South African pop­u­la­tion is said to be on med­i­cal aid, this is not to say that ev­ery­one who be­longs to a med­i­cal scheme can af­ford to make co-pay­ments or out-of-pocket pay­ments when they have ex­hausted their med­i­cal scheme’s an­nual ben­e­fits.

To make up for this, the short-term insurance in­dus­try came to a boom in most re­cent years as gap cov­ers, top-up cov­ers and hos­pi­tal cash plans started be­ing in­tro­duced to fill the gap.

Med­i­cal gap cov­ers pay the short­fall be­tween what your med­i­cal aid has paid for and what med­i­cal pro­fes­sion­als ac­tu­ally have charged for their health­care ser­vices. While top-up cov­ers pay for med­i­cal treat­ment when a med­i­cal scheme mem­ber has ex­hausted their med­i­cal scheme ben­e­fits or reached their med­i­cal aid lim­its for the year.

Hos­pi­tal cash plans pay cash out to the cus­tomer for the num­ber of days spent in the hos­pi­tal re­ceiv­ing treat­ment. This ap­plies to both med­i­cal scheme mem­bers and those with­out a med­i­cal aid.

WHICH OP­TION IS BEST TO SUP­PLE­MENT ONE’S MED­I­CAL SCHEMES?

Old Mu­tual’s Al­ter­na­tive Dis­tri­bu­tion gen­eral man­ager, Mokaedi Dilot­sotlhe, says that

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