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What to consider when reviewing your 2021 medical aid options

Lower member premium increases are on the cards: Annelé Oosthuizen from Alexander Forbes Health.

NOMPU SIZIBA: It’s that time of the year when medical-aid holders can reassess the kind of cover they need for next year. We know that this year has been a tough one economically for many, but this year has also shown us that health is an important priority to try to cover if one has the means to do so.

To discuss the kind of options available for next year and more, I’m joined on the line by Annelé Oosthuizen, branch head at Alexander Forbes Health. Thank you so much for joining us, Annelé. So now we’ve come to that time of the year when consumers have to decide on whether to upgrade or downgrade their medical-aid cover. Of course, this year the pandemic has really shown us that some of some sort of cover is needed, so what kind of cover options can consumers choose from?

ANNELÉ OOSTHUIZEN: Thanks for inviting me. Absolutely, it’s been a challenging year for a lot of members and we are getting a lot of enquiries from members wanting to downscale because they just can’t afford it with all the changes that Covid brought along. But there are also new members who have never belonged to a medical scheme and would like to join.

So, best advice is to call a consultant, who can take them through the various options available, because members can choose from having only a hospital cover up to a more comprehensive plan that will cover all their day-to-day [medical expenses].

NOMPU SIZIBA: And, of course, the reality is that if you pay less, you’re going to get less in terms of what’s offered.

ANNELÉ OOSTHUIZEN: Yes, but it’s always been like that. If you want freedom of choice and you want this car and the best car, you will pay for it. But that doesn’t mean that your plans that have more restrictions don’t have affordable and very comprehensive cover because, though the members are on a medical scheme, they are actually safeguarded by the medical scheme with all the prescribed minimum benefits that medical schemes are compelled to cover. Those include all emergency medical conditions, include your … medical conditions that are listed, and also include 25 chronic conditions. So on every medical option on a medical scheme, the medical schemes are compelled to cover those prescribed minimum benefits.

NOMPU SIZIBA: What’s the best way for consumers to stretch their medical-aid benefits?

ANNELÉ OOSTHUIZEN: Well, you need to decide what are your needs and obviously those of your dependants, and look at your medical needs as well as your financial needs. And then a way that you can actually choose the plan is looking at whether you will have limited, or unlimited hospital cover, whatever you are comfortable with. You can look at the way that the medical scheme refunds the providers, whether it’s according to the medical scheme tariff, or whether they need to pay the private tariffs that are charged by your medical providers. You can limit your provider choice and, by even doing that, restricting your cover. But you still have unlimited hospital cover in most cases. But can actually just pay a lesser premium if you look at your provider lists that are applicable to your medical option.

And there are also other ways that medical schemes can actually reduce the cost by including upfront health payments that you have to pay from your own pocket. So if you’re willing to do that, you can actually choose an option that costs you less per month, giving you a little bit more expenditure during the month. But those co-payments can also be covered by “gap” covers or “complementary” cover. So you can actually save more and pay a gap cover rather than having the more comprehensive type of cover.

NOMPU SIZIBA: What’s your sense around how medical premiums are going to look for next year? Discovery came out with a decision not to raise premiums for at least the first half of 2021.

Read: No contribution increase for Discovery Health members until July 2021

ANNELÉ OOSTHUIZEN: It’s interesting, and they are the only medical scheme that gave that option. But we have seen lower increases mostly, probably due to a letter that was sent through by the Council for Medical Schemes earlier in the year, that medical schemes also need to look at that. But it’s been difficult for medical schemes. I think there’s a lot of uncertainty with regard to the Covid claims that came through, a lot of uncertainty with future Covid claims. Most of the medical schemes have actually indicated that their claims ratio is lower than in the past, due to members that didn’t go for their planned procedures. So medical schemes obviously need to take that into account, and they need to do some planning.

I think it was a hard year for the actuaries in the industry, but we have seen some lower than usual contribution increases on medical schemes. I think most of them have tried to stick with the Consumer Price Index inflation, and obviously differ, but it’s more or less in the 3% area. But schemes also had to take other factors into account, like the reserves that they need to keep, utilisation, technology that they need to cover. As I say, it’s so difficult year for medical schemes, but we have seen lower contributions for users for 2021.

NOMPU SIZIBA: Annelé, thank you so much for your time and your insights there. That was Annelé Oosthuizen, branch head at Alexander Forbes Health.



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