Smaller schemes do well in comparison of medical aid value

TWO smaller medical schemes — CompCare and Fedhealth — trumped their larger rivals in the first independent, publicly released comparison of medical aid plans by GTC Healthcare.

Scheme options were divided into 10 categories as GTC (formerly Grant Thornton Capital) took a microscope to the country’s 22 open medical schemes.

But Jill Larkan, the head of GTC Healthcare, says it is virtually impossible for people to make meaningful comparisons between the myriad medical aid options on the market.

“Providers are trying to make their plans more attractive by adding on multiple options, making comparisons even more difficult,” she says.

“If anything, these plans have become more complicated over the years, by virtue of the additional benefits, options and cover choices provided.”

Although this is the fifth annual survey of medical aids, it is the first time the results have been made public.

The survey looks closely at inhospital benefits, as these represent 60% of all costs carried by medical aids. In-hospital cover levels vary from 100% to 300%.

But Larkan says there is little clarity on whether even a basic plan from one provider is better value than one from the next.

In general, plans are divided into lower-cost “saver” ranges, and higher-end “comprehensive” options. The price depends on whether a scheme member agrees to use an existing hospital and doctor network.

More people now choose the “saver” range than ever before — mainly due to recent steep rises in medical-aid prices.

People who were on comprehensive plans are moving down because of costs, says Larkan.

But even in this category, there are no fewer than 68 plans for people to choose from, and 31 plans if members agree to be part of a network.

Profmed is ranked top in the saver range with no network, while CompCare tops the saver range with a network option.

Larkan says the results show the lowest cost, rather than which medical aid provides the best benefits. Members still need to compare benefits line for line, and to decide whether these meet their main needs.

The fact that Discovery Health Medical Scheme, which accounts for 52% of members of open medical schemes, was picked as the top scheme in just one category was a surprise.

But Larkan says Discovery has to charge higher premiums to attain its mandatory solvency ratio, which requires medical aids to hold reserves of up to 25% of its contributions.

“Discovery is still playing catch-up, so its premiums have been inflated to (reach) the 25% level. From 2016 going forward they should no longer be faced with this burden,” she said.

But the faster Discovery grows, the more money it will need to put into reserves, which means it may have to hike premiums again soon.

To Larkan, the biggest surprise is how few people understand what “100% cover” means. When a medical aid says it will cover 100% of in-hospital costs, this does not mean it will cover all hospital bills — only 100% of the medical-aid rate, equating roughly to what a state specialist would charge.

But most specialists charge double or triple the medical-aid rate, especially in private hospitals in affluent areas, leaving members to pay additional fees out of their own pockets. Larkan says this is why members should consider buying top-up plans, or gap cover.