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Narrowing the self-payment gap

Medical scheme members: What it is, what contributes to it, and how to manage it.

It’s not even halfway through the year and your medical savings have run out, leaving you in the dreaded self-payment gap (SPG). Sound familiar?

It’s something that happens to many medical aid members, but about which many are in the dark.

“Approximately 65% of members on plans with a SPG deplete their medical savings account at some point during the year,” reveals Deon Kotze, Discovery Health R&D head.

“Of those members, two thirds reach their annual threshold and receive extended cover for day-to-day healthcare expenses.

What is it?

The SPG is an amount assigned to members, that they must pay in full for day-to-day expenses, once their medical savings have run out. These claims are submitted to the scheme, not for refunding, but to reduce and close the gap – after which the above-threshold benefit takes effect and the scheme again pays for day-to-day claims.

It’s applicable to schemes/plans with an above-threshold benefit (limited or unlimited) – usually top-end plans.

SPGs are mechanisms “which the scheme can use to transfer some of the ‘out of hospital expenses’ risk from the scheme to the member,” adds Jill Larkan, GTC healthcare consulting head. This allows schemes to reduce premiums and make [the plan] appear more attractive.

Your initial self-payment – which can increase – is the difference between your annual threshold and annual savings, Chartered Employee Benefits healthcare specialist Devlin Ross writes here.

That the SPG’s not fixed may be a surprise.

What adds to the gap?

Some claims made from savings, may add to the SPG.

Some reasons why Discovery’s SPG increases:

  • Medical savings accounts smaller than the annual threshold;
  • Members claim for over-the-counter (OTC) medicine – including schedule 0, 1 and 2 – from savings;
  • Claims submitted from the previous year and paid from savings;
  • Claims paid over a plan’s annual benefit limits;
  • Special payment applied for from savings;
  • Procedures and medicine that don’t count toward closing the SPG paid for, e.g. certain alternative treatments such as reflexology and acupuncture. 

Tips for closing the gap

SPGs are only reduced by claims members pay for that are at medical aid rates, among other things, writes Ross.

For example, if you pay a GP who charges R500 – and submit the claim to the medical scheme to reduce your SPG – if the medical aid rate for a GP consultation is R320, your SPG will only reduce by R320.

As such:

  • Evaluate your medical aid plan: what you’re covered for, at what rates, with which providers and if a specific hospital or pharmacy network much be used, says Kotze. Members really wanting to avoid any SPG, must consider a comprehensive top plan, which can be costly, adds Pascale Bargehr, Total Risk business development officer.
  • Ross concurs. Ensure you really need a plan with an above-threshold benefit. If you’ve been on a plan for two years or more and have never closed your SPG, you’re likely a little over-insured. A financial advisor can assess your needs and place you on an appropriate plan.
  • Look for schemes offering benefits paid from risk. These benefits offer more value for money and are in addition to savings and day-to-day benefits.
  • When entering an SPG, ask your scheme what counts towards closing the gap. Then manage your spending efficiently to maximise benefits, writes ThinkMoney here. 
  • Always use a partner network hospital, doctor or pharmacy: you won’t be charged over the rate agreed on with the scheme. This helps avoid copayments, deductibles and additional out-of-pocket expenses, says Gerhard van Emmenis, Bonitas Medical Fund acting principal officer.
  • While using your medical savings, and when in your SPG, use service providers (GPs, dentists, etc) who charge medical aid rates. Then your SPG will be at the same amount originally indicated on the benefit schedule, says David Narun of Informed Healthcare Solutions.
  • “If [hospital] procedures attract a copayment, negotiate with the provider on alternative/more conservative treatment protocols where possible, explains Ann Streak, Alexander Forbes Health senior consultant.

 

Van Emmenis and Kotze share a few more tips:

Use managed-care benefits. Some schemes offer preventative care benefits, paid from risk, not from savings, including oncology, HIV and diabetes management programmes.

Pharmacists can provide sound advice on some medical problems e.g. rashes or colds.

Pay cash for OTC medicine for less serious ailments. Consider cheaper, effective generics. 

Know doctors’/specialists’ rates. Ask what rates your doctor charges and if you’ll be liable for co-payments. If affordability is a concern, look for a provider who charges medical scheme rates. 

Register chronic diseases. On regular medication for a chronic illness? You may qualify for chronic medication benefits, which your scheme pays for from risk.

Schemes often have lists of medication covered in full for chronic illnesses, called ‘formularies’. Ask your doctor/pharmacist if your prescribed medicine is covered in full. If not, ask about alternatives.

Pre-authorise all hospital admissions to ensure you’re covered. Ask if copayments or sub-limits apply and how to avoid them. Ask your scheme if you’ll have better cover for planned procedures, by using contracted providers or having the procedure in a doctor’s rooms or day clinic.

Read information (fine print, scheme rules) sent by your scheme or financial advisor.

Use your scheme’s preventative screening benefits (wellness programmes) for regular health checks.

Lead a healthy lifestyle.

Other recourse

GTC has found it more beneficial for members to run a personal savings account, than upgrading to avoid SPGs. “Upgrades usually come with additional benefits in areas members don’t need. Members simply need more day-to-day spending money…this is provided less expensively by their own funding account,” says Larkan.

Discovery offers certain benefits to members in their SPG, including network GP consultations, casualty visits for children, gynaecologist consultations during maternity, and pathology at a network pathologist.

Bonitas’s cost-containment strategies include upskilling GPs to perform minor procedures in their rooms rather than referring patients to specialists; developing managed-care programmes to help members manage chronic conditions more optimally; and creating networks of designated service providers with specific rates.

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Silly me. There I was thinking that this article was going to deal with the difference between what e.g. banking CEOs pay themselves, and what they’re really worth. Oh, well…

My advice / suggestion is not to let the Doctors know you have day-to-day benefits and pay cash and then claim back from your medical aid.You will be able to ask for a discounted rate( and if the Doctor does not discount you for cash change him to someone else as soon as possible)! As someone who deals with this personally and via my business we find that as soon as you let a Doctor know you have d2d benefits they milk their treatment to you and maximise their portion take of your MSA and that is why medical costs are so high today. Their new trick is to ask whether you have Top up insurance (Gap cover) and then they double charge you and claim twice! Perhaps the ethics of the South African Doctor should rather be looked as rather than you and me simply paying more every year for them to simply keep charging us more!

Oh really, this process is too complicated and outdated. We need a game changer here…. an “alpha disruptor”. This industry has reached its sell by date… I Wish I had deep pockets, I would kill this monstrosity.

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