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
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