Take the gap while you can

Image courtesy stock.xchnge (Kurhan)

Image courtesy stock.xchnge (Kurhan)

My oldest friend is a trust-fund kid. Don’t be envious; it’s not a trust fund any of us would wish for – a car accident left her partially disabled and insurance paid out a lump sum, which today forms the basis of her trust.

The medical scheme, a closed fund, covered a good portion of the astronomical medical costs, but the balance was funded from her parent’s long-term savings.

Just 16% of South Africans can afford to invest in medical aid – 60% in a hospital plan – and this number is falling.

Medical schemes have subjected their members to above-inflation increases for the better part of a decade. So, the million dollar issue for those who want access to private medical care, is can medical aid costs be better managed?

The answer according to Clayton Samsodien, MD of Genesis EB Solutions and Len Deacon, CEO of Len Deacon & Associates, is absolutely.

It sounds obvious, but … Most of us choke on the monthly costs, but haven’t read the benefit statements and have no idea of exclusions (obesity management, frail care or fertility treatment), or even which procedures require co-payments or deductions (removal of wisdom teeth, colonoscopies and joint replacements) in our particular plan.

Review your own changing needs and requirements annually. You can upgrade your medical plan once a year, usually in January.

If you are 25 to 35, with no kids, in reasonable health and happy to cover visits to the doctor and chemist the most effective choice is a hospital plan. But if you are older, have a chronic condition or perhaps have a young family, then an option that includes day-to-day coverage might be more cost effective.

“In these circumstances, it doesn’t make sense to pick a low cost option because you end up paying in down the line,” says Samsodien.

Options that include day-to-day coverage are usually limited by treatment protocols and restricted medicine lists. “Examine the list of doctors in your area. If you like it then it can make good business sense to go with a capitated scheme,” says Deacon.

An alternative is the so-called new-generation plan which incorporates “medical savings” concept. (Just to confuse you there are also hybrids). Savings are a percentage of your monthly premium which is given to you upfront and are used to cover just about everything outside of hospitalisation.

The most important question is: how are you covered in hospital? Most providers cover you at 100% of the normal medical scheme rate. Other options cover you at 120%, 150%, 200% or even 300%. It is important, where you can, to negotiate rates up front with the medical provider.

If negotiations aren’t your thing, consider gap cover. This is a type of short-term insurance that is available only to medical aid scheme members. “It allows you to buy medical aid at lower price and use gap cover to top up,” says Samsodien.

Rewards programmes can help you to be more proactive about your health, while lowering the cost of medical aid. Discovery’s Vitality is well known, but others include Momentum’s Multiply and Liberty’s Own Your Life Rewards.

Tax benefits must also be factored in. Under the tax credit system you earn R242 for the main member and first dependant and R162 per child thereafter.

Lastly, take responsibility for your own health. Get yourself checked out regularly.




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