South Africa's medical aids rank amongst the world's finest, but with over fifteen medical aid schemes from which to choose, making comparisons can be baffling.
Medical schemes, also known as medical aids, are the main funders of private healthcare in South Africa. When choosing a plan, you are confronted by the following three choices:
1. Hospital plans (network or free choice) – provide partial or complete in-hospital cover depending on scheme rules
a) Network options – you need to use the medical facilities prescribed by the scheme or make a co-payment when using a hospital outside the network.
b) Free choice – allows you the freedom to use the hospitals of your choice where you are not bound to specific hospital networks.
2. General cover plans – provides you with in-hospital and some out-of- hospital benefits.
3. Comprehensive plans – delivers in-hospital and extensive out-of-hospital benefits including doctor visits, prescribed medication, optometry, dentistry, radiology, and certain pathology benefits.
"When making your medical aid choice, make sure that you compare apples with apples across schemes to determine which plan best suits you," says Alexia Graham, Director, Hippo Advice.
When comparing medical aid schemes and deciding which to choose:
1. Understand your budget – Most people would like the very best medical cover but you should be realistic regarding what you can afford. Medical aid premiums range from around R1,000 for a basic plan, to comprehensive options that can cost as much as R10,000 a month. If you aren't sure what you can afford, draw up a monthly budget and identify how much you can spend on medical aid before making a decision concerning which plan you wish to take out.
2. Ensure value for money – Look out for good value for money rather than premium costs. Some medical aid schemes manage their costs by limiting payouts on certain costly procedures such as oncology and joint replacement. When choosing your medical aid don't be blinded by cheaper premiums but be aware of your scheme's limitations and whether these shortfalls negatively influence your cover and the value you derive from your scheme.
3. Evaluate your medical needs – All plans have specified benefits and exclusions. Consider these together with the state of your health and that of your dependants. Although it's impossible to predict future health problems, it is important that your plan adequately covers your current medical requirements.
4. Understand the impact of your demographics – The following two aspects are particularly important:
Age – Generally speaking you need more medical cover the older you become. Most people develop more health concerns with age and require greater amounts of chronic medication and in-hospital care.
Family size – The more members you place on your medical aid the more expensive it could be. It is also important to assess the impact of adding additional family members to your medical aid.
5. Confirm co-payment amounts for specialists and hospital procedures – Medical aids don't cover all treatments and procedures, thus certain amounts need to be funded from members' own pockets as co-payments and with rates determined by the medical aid scheme. Co-payments often catch members unaware as they can be expensive no matter your choice of scheme.
6. Look at the annual hospital limits – Hospital stays often cost more than expected. It is important to understand hospital limits and assess whether your scheme sufficiently covers the potential needs of your family. If in doubt speak to a Hippo advisor about gap cover – this is a separate insurance product that can be taken out to supplement shortfalls incurred during hospitalisation or other major medical expense.
7. Investigate the medical aid's payment record – Certain medical aid schemes have a reputation for delaying payments and, as a result, many medical practitioners shy away from these plans. Make sure your scheme handles payments quickly and efficiently to prevent inconvenience and embarrassment.
8. Study the benefits – Although they can be confusing, it's important to read and understand the benefits offered, what is excluded, and how these relate to you and your family's medical needs.
9. Investigate underwriting implications – Ensure you understand how medical aids underwrite a new application. Understand how this applies to you as a first time buyer or when switching medical aid plans, in particular check the waiting periods during which you are not able to claim.
10. Study the plan's HIV Cover – It's important to assess the benefits and cover provided for HIV as it is extremely prevalent in South Africa and makes the person more vulnerable to other diseases and infections.
When comparing and choosing medical aids, consider your other financial products and investments. Some medical aid schemes are aligned with insurance companies and provide medical aid products, car insurance, life insurance, and investment products. Legally, medical aids are not allowed to reduce their monthly contributions through product bundling or integration. However, certain companies discount life insurance products when member's health benefits are with the same company.
When taking out medical aid for the first time or if you are thinking about switching plans, consider speaking to your financial advisor or a professional independent broker. These financial specialists are able to understand your unique requirements and provide you with unbiased advice.
To reduce monthly contributions, choose in-network hospitals for planned procedures rather than a choice of private hospitals, or select a scheme with exclusions and co-payments on certain in-hospital procedures, but remember that co-payments can be costly.
Many members are influenced to take out a particular medical aid because of its related loyalty programme. However, Graham explains: "The true value of a loyalty programme is in changed behavior that results in a healthier lifestyle. The positive consequences of achieving defined goals to earn discounted prices or free rewards is healthy behavior, including physical activity, healthy eating, healthy lifestyle habits and regular medical screening for early detection of illnesses."
Calculate the rand value of the rewards you derive from belonging to a loyalty programme during the year or at year end by adding up all the discounts you receive and make use of. Loyalty programmes are of little value if a member is not engaged or does not understand how to optimise the benefits of the programme.
Do sufficient homework when comparing medical aids to get the best one suitable for your needs.
This article is for informational purposes only and should not be construed as financial, legal, or medical advice.