SWITCHING BETWEEN MEDICAL AIDS

The best time to move from one scheme to another – and how to go about it

YOU’RE allowed to change medical aid schemes any time but it’s usually best to do it at the end of the year. Many people think if they switch in the middle of the year they can use all their old fund’s benefits then start fresh with the new fund but it doesn’t work like that. If you move to a new scheme at any time during the year your benefits will be calculated according to the number of months left in the calendar year and you’ll receive pro rata benefits for those months – not a full 12 months’ benefits if, for example, you switch in June.

So if you’re considering a switch, opt for January when you have most of the years’ benefits to look forward to. The new scheme you switch to is also allowed to insist on a three-month waiting period, during which time you’re entitled to claim only prescribed minimum benefits, or PMBs (see medicalschemes.com for a list of these). That means for three months you’ll be paying your full monthly contribution but without having access to all the benefits (see the box below).

It’s also a bad idea to switch schemes if you’ve already exhausted your current fund’s savings benefits because you’ll probably be indebted to your current fund, warns Deon Heydenrych, a medical insurance broker from Stapleford Insurance Brokers.

This is how it works: plans with savings options allocate a portion of your premium, for example R500 a month (making it R6 000 for the year), to your savings account. The full R6 000 is available for your use from the beginning of the year, so if you use all of it then switch schemes you’ll have to pay back the difference. This is the case for all medical schemes.

For example, you want to switch on 1 June so the amount from your savings account you were allowed to spend is R500 x five months = R2 500. But you’ve already spent R4 000 of the allocated R6 000, so you’ll have to pay the old scheme the difference in cash, which is R4 000 – R2 500 = R1 500.