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Comparing and understanding medical aids in 2018

It must become easier.
In order to be a cost conscious healthcare consumer more informations needs to be made available. Picture: Moneyweb

Medical aids can be difficult to understand. After reading the emails, websites, short and long brochures, rules and annexures I struggle to know what cover I’ve got. This makes it hard to compare plans and options. And I’m not alone. The Health Market Inquiry has noted “the inability of individuals to compare options effectively”.

More disclosure on coverage would allow for easier comparison between plans and options, and go a long way in making consumers cost conscious and aware of what their medical aid offers.

There are many excellent articles and guides on how to compare medical aids. In three easy steps you look at your state of health and what cover you might need, the options available in your price range, and the state of health of the medical schemes you are considering.

Determining your state of health and the state of your schemes’ health is fairly easy. Schemes publish detailed annual reports and the Council for Medical Schemes (CMS) annual report contains industry and scheme information. Although you can’t forecast every illness, you’ll have a good idea if you are a high, medium or low consumer of healthcare.

But when you start looking at what schemes cover, the information available isn’t always helpful.

Take the two largest medical costs – hospitalisation and specialists.

In 2016 these accounted for 37.4% and 24.02% of medical expenditure according to the CMS annual report. That’s just over 60% of medical costs, so you’ll want to know if you are covered or not.

Here’s how three open scheme medical aids say they cover hospital costs:

“Unlimited cover in any private hospital.”

“Hospital accounts are covered in full at the rate agreed upon with the hospital group.”

“An account can either be covered in full or covered up to an agreed rate.”

The first one might lead you to believe you are covered for everything, but unlimited is unlimited for most procedures  – not all. Scopes (‘oscopies) and radiography for example often have copayments and limits. Fortunately, copayment and limit information is fairly easy to find in brochures.

The second and third examples use a well-worn medical aid term – ‘rate’. Unless you know what the rate is, how do you know what you are covered for?

Specialists, whose consultations in hospital don’t form part of hospital costs, are also covered at a ‘rate’.

“Specialists: We don’t have a payment arrangement with and other healthcare professionals (are covered at) 200% of the (scheme) Health Rate.”

“Specialists: We pay 100% of the (scheme) rates for professional fees.”

“Funded in full at the negotiated rate.”

Two hundred percent of R750 is R1 500. But what is 200% of the ‘rate’ and how do you compare this to other schemes and options? Do you need 200% cover or will 100% be enough? Is 200% cover of one scheme equivalent to 200% cover of another scheme?

A number of healthcare advisors I contacted indicated that rates don’t differ by much per scheme – 10% to 20%, but that can make a difference to your decision and your pocket.

Rates are negotiated on an individual basis with hospitals and specialists. Specialists’ rates history lies in a reference price list intended to be used as a guide, but declared invalid by the High Court in 2010. So each hospital and specialist can have a different rate with different schemes, renegotiated at different times.

While appreciating the confidentiality of negotiations, it would be good to know how close rates are to the actual costs, and how those rates differ scheme to scheme to make comparison easier.

I asked open scheme medical aids for comment on rates. Some schemes have Prescribed Minimum Benefit (PMB) tariffs on their sites, and rates are referred to as percentage increases each year in some scheme’s rules, but for most, rates are the result of private negotiations and they aren’t made available upfront when you are choosing a medical aid.

These rates aren’t strictly confidential because when you have treatment or undergo a procedure the costs are known.

There is a lot of information on rates because the amount of medical treatments and procedures runs well over 200 pages. Not everyone is going to read that much information. But that isn’t a good enough reason for not making it available. As medical aid is expensive and important I am prepared to spend time getting to know what I am buying so I know if I have adequate coverage or not.

Out of pocket expense figures based on claims not paid by medical aids can give some idea of how close coverage is to cost.

Hospital accounts are generally well covered and the CMS figures for out-of-pocket expenses (claims not paid from risk benefits) show that only 7% (R2 billion) of out-of-pocket payments went the way of hospitals in 2016. Only is a relative term. If you’re required to pay R7 000 of a R100 000 bill, it’s significant.

A total of R4.158 billion was paid as an out-of-pocket expense to specialists in 2016 – 14% of out-of-pocket payments, according to CMS figures. (The highest (32%) out-of-pocket spend is for medicines.)

The December 2016 Health Market Inquiry (HMI) reports show that specialist and doctor rates cluster around medical scheme rates, with a few outliers. The 2014 figures in an HMI publication show that around 4% of claims were unpaid by medical aids for in-hospital expenses; 6% to 7% of out-of-hospital expenses’ claims were not paid by medical aids.

Gap cover brochures also contain good examples of costs not covered by medical aid. And figures for individual schemes are included in some schemes’ annual reports.

It’s good to have these numbers – but they are overall numbers or averages. In a system where some are very high consumers of medical aid and some consume extremely small amounts, averages don’t lend themselves to useful comparisons.

I’d like to be a cost conscious healthcare consumer – but I can’t if information on costs and coverage is not available.

Too often I feel I am selecting an option with limited information, and signing a contract without being able to adequately compare options and without knowing all the terms and conditions that may apply.

Getting to know financial products and reading rules, terms and conditions is a good idea. Rare or not.

More disclosure on coverage would increase awareness of the cost of medical care, and avoid the surprise medical bill not covered by medical aid.


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Patricia’s concerns are very relevant given that SARS now virtually reject any medical claims – whether it be monthly contributions or excess over scheme limits, and/or co-payments
The medical fraternity are practicing alchemy once again

My wife is out now trying to find a Discovery agent who can explain where we stand,
It is ridiculouse to try and understand the meanining of so much. We downloaded our scheme benefits but do not understand their jargon. Why dont they put it in simple language that we, the public can understand. They must spend a fortune on someone to write that so no one can understand. Ridiculous.

Ask Discovery for the name of an external consultant that will assist you. Or find a reputable medical aid consultant in your area. Part of your premium pays for this.

Why should part of your premium pay for this. You consult once, and should therefore pay once.

LOL -Great article and a concern to all affected!!

Last year I spent a considerable amount of time trying to compare different schemes and their cover/costs to no avail or reliable and predictable outcome.

So I went for the discovery scheme – for better or worse trying to believe that bigger is better.

The medical maids deliberately make it hard to compare benefits.
My view is to look at the catastrophic costs and insure against them.
Those would be major illness or accident, cancer chemotherapy and some chronic but expensive conditions. My advice (as a doctor) is to start with a basic hospital plan when you are healthy. This will cover the majority of your expenses BUT NOT ALL. Pay cash at the GP surgery. Buy gap cover to top up any shortfalls, this is much cheaper than upgrading your medical aid plan. If you develop conditions that require expensive chronic meds or frequent visits to doctors, look at the option of moving to a higher plan in your chosen medical aid. You can do this at the end of any year without penalty, so when the cost of your monthly drugs and doctor appointments exceeds the cost of the higher plan it is time to move.
And of course try to live a healthy lifestyle.

I doubt that you’re a doctor.
1) It’s unethical to be giving advice like this over the internet (particular explicitly stating that you’re a doctor)
2) If you develop a condition that requires chronic medication or treatments for that condition, you cannot move from a lower scheme without the benefit to a higher scheme to receive the benefit for that – the medical aid will exclude you for that specific condition.
3) Point 2 then invalidates your other arguments for once-off insurance payouts to cover medical expenses because those one-off payments in most cases wont cover your ongoing treatments for longer than a window of about 3 or 4 years.

Not so. Boomgloom is quite correct. You can upgrade your medical aid option at each year-end for the new year with no exclusions. Exclusions apply only when you have been without medical aid cover for in excess of 90 days. Even the hospital options to which he refers are medical aids and are already required to cover the PMBs which include 26 chronic conditions. It’s only if you acquire a chronic condition which is not one of the 26 that one may want to upgrade after looking at the costs involved versus the cost of upgraded cover.

You mention once-off insurance payments. Are you referring to the gap cover? That is mainly for major medical expenses like hospitalisation, not ongoing things with the possible exception of cancer if your cover includes that.

The first thing that you must decide on is do you need a Beetle or a Rolls Royce. This depends on your health status but your cash flow also plays a big roll. Do not depend on SARS for repayment of excesses. Stick to your chosen fund and upgrade or downgrade within your chosen fund as your situation changes once a year. Remember when you change Medical Aid Funds you will not get the full benefit for that year and big co-payments is the order of the day depending on your health situation. Sometimes it is better to stick to the devil you know.

Obfuscation is the name of the game! A very profitable strategy indeed.

And just who is making the money here? Hospitals overcharge. They are more expensive then full board 5 star hotels and have nursing staff (most – not all) that need a swift kick up the backside to get anything done. Then there are the doctors, most of which are c contracted out and use you as an experiment. If the pink pill does not work come back and pay for another consultation and he will give you green pills. Specialists are even more of a rip off. 4 to 6 months wait for an appointment and pay cash up front because they charge ups to 5 times the medical aid tariff. Again, you areas experiment but of course your experiment is under the charge of an ‘expert’.

As for the medical aids who have so many staff members who pass you from pillar to post when you phone. And their management. All earning exceptionally high salaries.

I would love to see an article that lists all medical aid and hospital management, say what car they drive, and say if it is Company owned or paid for by themselves.

List also the qualifications required to be nursing staff. Let us see just how many qualified people we have working in the profession or if it is just a job to them?

Include private and state hospital and medical staff. Lets see who is taking home a ransom or not.

We have a thread on Platinum Wealth where a user documented his journey to choose a medical aid.

The whole industry is as corrupt as Zuma and greedy as wolves. It is utter nonsense that medical costs can be so exorbitant when medication, doctors and operations have been around for the last 50-100 years suggesting that this not ground breaking biotech – 30 years ago no one complained about medical costs – it was only when the friken insurance industry came into the picture of medical treatment that the opportunity to exploit people came about were private hospitals saw the perfect way to receive payments directly from insurance companies. The break down of our public health system provided these thieves with an opportunity they could only dream about. When is it that the competition commission is going to wake up and realize that poor south africans are being taken for a ride when they are at they most vulnerable – ie ill.

There are no medical aids north of South Africa unless you join the international one,s like BOMA .Equivalent medical care to RSA is much more than here and is Cash up front .Do you really want the Government to get there hands on the money flowing from patients to service providers ?.Private capitalist medical system is the only way a service will survive on this corrupt continent.Due to corruption and mismanagement ,nobody wants to work in the state institutions anymore.Like anything in life you get what you pay for

End of comments.





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