Medical aid prices in SA are skyrocketing each year and it is becoming relatively hard for the middle- and lower-income class to afford it. This means that comprehensive coverage is now almost out of reach for many people especially those with families.
How do administrators determine the price of medical plans? What are the different types of medical plans and their financial trends? At this point, is there any solution to affording private healthcare? How can knowing of the financial trends help you make an informed decision on private healthcare? This post will shed some light on these questions.
How do administrators determine the price of medical plans?
Knowing how administrators determine tariffs for medical plans is important. This information comes in real handy when you want to take the step of investing in your healthcare.
Medical aid schemes determine their rates based on risk. They use the number of claims processed over time and assess the risk of the volume of claims re-occurring.
Medical expenses in South Africa are not regulated. This means that doctors, specialists, and hospitals can charge any amount they want, if the fees are seen to be of fair value to the policyholder.
Medical schemes rates (MSR) are the amount that medical aid scheme is prepared to pay for treatments and procedures. These tariffs differ from plan to plan. Usually, the lowest premium medical aid will pay up to 100% of your medical expenses. That seems like everything is covered, doesn’t it? Except, because there are no regulations on medical expenses, the charges for procedures and treatments can go all the way to 500%. And if you are on a much more comprehensive plan, your scheme may pay up to 300% of these procedures. So even with that, the possibility of falling short is great.
Let’s say you are on a cheap medical aid plan which covers some of your day-to-day medical expenses as well as in-hospital cover when you suddenly become ill. It is determined by diagnosis that you need to be booked in for appendicitis removal surgery. You are on the lowest premium medical plan and it covers 100% of the procedure. But the doctor charges 300%. This means you have 100% of the expense covered and 200% will be out of pocket.
Medical aid schemes vs Healthcare provider – How to minimize impact of the gap
There are ways to minimize the gap between what healthcare providers charge and what your medical aid scheme is willing to pay. By signing up for the highest medical aid cover, or a more comprehensive cover, you can avoid having to chip-in from your own pocket. You can also ensure that you use doctors or specialists listed under your network. This will minimize costs and ensure you do not have to worry about co-payments depending on the medical aid plan you are on.
Gap cover is also another way of minimizing medical expenses. Gap products have affordable premiums and will cover the gap left by your medical aid. Depending on the plan or provider, you can pay less than R150 for up to 500% additional cover on tariff shortfalls. Furthermore, you can try to negotiate fees if providers are contacted out.
Alternatives for medical aid plans
In instances where getting medical aid is out of your budget but you still need access to private healthcare, it is a good idea to consider the following:
Hospital plan
A medical aid usually takes care of both day-to-day medical expenses and hospital expenses should you be in an emergency or scheduled stay at the hospital. A hospital plan only covers you for in-hospital cover and selected procedures while you are booked in hospital. It is more affordable compared to a traditional medical aid.
Medical Insurance
Medical Insurance is not a substitute for medical aid as many would think. It covers only a day-to-day cover, emergencies, and some selected procedures. Depending on the cover, and provider, Medical Insurance can cost from less than R500 per month. This amount covers day-to-day and may include other non-insurance benefits that include counselling and coaching.
Accident cover
Accident cover only covers emergencies like accident and sudden illnesses like strokes and heart attacks. It covers some procedures related to accidents and in-hospital treatment in case of an emergency. Because it only focuses on accidents, the premiums for some providers can range from less than R250 per month.
Medical aid trends and making wise decisions
When considering taking up medical aid, it is also important to get insight on the financial trends of the private healthcare. This will help you see which medical aid option to go for and if you already have one, you will know if you are getting value for your money or if it is time to switch.
Not all Medical Insurance plans are the same and benefits as well as limitations may vary. Descriptions of benefits given are meant to be for general educational purposes only and you must ensure that you seek the advice of a broker to ensure any product choice you make suits your individual needs.
