The murky waters of medical aids and insurance

Prof Carol-Ann Benn elaborates on diving into the murky waters of medical aids and insurance in the hope to find the Kingdom of Atlantis.

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PLEASE NOTE: These views aren’t that of a specialist in the field of insurance or funding, merely a breast specialist who believes that healthcare is a human rights issue.

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When the lines blur between the kingdoms of medical aid (which one to live in) and medical insurance (more a province), safety is paramount when taking a deep dive into the murky waters of medical aids/insurance. All theoretical dive exams should be done with a good dive instructor on hand. 

Maybe, like the Disney Atlantis, I’m the naive explorer, Milo. With the help of my daredevil team (medical IT, colleagues, oncology navigator, and patients), we can uncover the mysteries of the deep dark ocean of healthcare funding.

The murky depths require understanding the dive tables (T&Cs) and reading the fine print in the manual before heading into the water. 

Healthcare in SA

Public healthcare is more affordable than private, but state hospitals are only sometimes free. If you’re employed, earning or own property, you’ll have to pay some or all of the costs.

Private healthcare is an alternative. But private healthcare costs an arm and a leg. You may only get the best medical treatment, if you’ve an extensive resource of readily available money.

Who has yet to hear of the city of Atlantis? Mysterious, full of treasures, and near impossible to find. Is this what you think you’re getting into when you spend your hard-earned money and join a medical aid/insurance. 

Some have a big money pie; others have a tartlet. Some share their big or small pie with parents, children, and siblings. Many don’t even have a crust or a crumb. So, when you give a piece of pie to medical aid/insurance, you need to know what it covers. 

Today, more than ever, many people are struggling to afford monthly medical aid contributions. This is like understanding your tank when diving, how big, what gases, and how long you can stay down. 

SA public health system

The SA public health system is like living on land and not realising all the beautiful worlds under the sea. Despite the government’s best efforts to provide free medical care for all citizens, the system needs to be fixed and able to cope with its enormous demands.

The kingdom of the land is fraught with tornados, earthquakes, and storms (problems that affect the infrastructure and cause service delays). 

The system is available for all who don’t have access to medical aid, and there is much debate around national health insurance. 

Doctors must look in the mirror

Pointing fingers, blame management, lack of water and equipment, etc. is easy. Though, doctors must also look right back at themselves. Remember being so proud, receiving that scroll…it’s the Hippocratic, not hypocrisy oath. 

If you’re getting a salary in the government service, you’re being paid to perform a service. To arrive at work on time, work the hours you’re paid for, and if you’re being paid overtime, be on the hospital premises when needed in that overtime capacity. This doesn’t mean sitting in an office as a consultant but attending clinics and ward rounds, teaching training, and managing patients. This isn’t a dig at doctors in public service. In private, if doctors offered some (not all) of their services at reduced rates or at no charge, this would also help people with needs to receive better care. 

Not all private medicine is reasonable. Surgeons suggest surgical biopsies and emergency mastectomies for breast cancer. Oncologists offer chemotherapy when it’s not needed or offer too much radiation. This is why all medical fields should have accredited and robust multi-disciplinary reviews, to determine options with the patient participating by getting feedback from a patient navigator. Sometimes, we can’t give the treatment we wish as it’s not publicly available and hence not offered by some medical aids.

Can you afford to swim in this ocean?

Most believe that the answer to quality care is having medical aid/insurance. However, you need to look carefully at whether you can afford to swim in this ocean. Beware of the danger signs when swimming, from the coral reefs to the great ocean depths; the sharks and undercurrents can result in significant financial injury. It’s crucial to carefully consider your options and potential risks when choosing a healthcare plan.

You probably already feel that having some medical aid/insurance is vital. Understandably, all insurance is a grudge purchase. If you’re young and healthy, why do you need health insurance? If you drive a Volvo, why do you need car insurance? Well, you still want to be prepared for an accident or emergency. 

Many will never get a chance to swim and see the lands under the sea as the costs are too high. If you’re going swimming, the rule is not to spend more than 10% of your monthly income on medical insurance. The cheapest option may not be the best and may leave you with high co-pays. Being prepared for emergencies can provide a sense of security and reassurance. 

Medical aids vs medical insurance

Understanding these distinctions is key to making informed decisions. A medical aid scheme provides its members with cover for expenses associated with medical treatment. There are conditions attached to treatments, doctors, and hospitals, and depending on the scheme tariffs, the amount you pay will depend on the amount paid out for the treatments. Medical aid schemes are regulated by the Medical Schemes Act and governed by The Council for Medical Schemes (CMS). 

Medical insurance gives out funds as a lump sum for a medical concern. The amount will stay the same regardless of the treatment you need. Some pay out different amounts for different stages of cancer. Others exclude cancer. Health insurance is regulated by the Long-term Insurance Act and is governed by The Prudential Authority and The Financial Sector Conduct Authority.

Some medical insurance products were introduced due to the premiums for medical aid plans rising above the level most can afford. This is often called gap cover. All medical aids and insurance have T&Cs.

Interesting ocean facts to know

Around 21 medical schemes are available; it can be challenging to investigate plans. Speak to reputable brokers; most people need help when dipping a toe in the murky water.

No one can be refused membership of a medical scheme unless they lied about a condition; this can result in a penalty exclusion time or being banned for life. Don’t lie!

Understand what your plan offers. Each plan, according to what you pay, offers specific options from hospitals to doctors to medicines allowed. Choosing the plan should be based on understanding your health risks. Your health is dynamic, which is why yearly change options are available. You can make a sensible choice and change that option every year.

Waiting periods may apply when joining a medical scheme, as they protect the scheme from adverse selection where someone joins a plan, has expensive treatment, and then immediately resigns, leaving the other members having to pay those costs. 

Depending upon your health status and prior medical aid membership, you may get a three-month general or 12-month specific conditions waiting period. It’s essential to fully understand waiting periods and late joiner penalties and what is required to reduce or waiver them.

Waiting periods don’t apply to:

• PMBs other than those specified.
• A child dependant born during the period of membership.
• A member moves between benefit options unless there is a remaining period of previously imposed waiting periods to complete.
• An involuntarily transfer to another scheme due to a change of employment.
• Where an employer changes the medical scheme with effect from  the beginning of the financial year.

You must pay contributions during a waiting period. 

Payment by medical schemes

Medical schemes pay claims from pooled funds, covering risk (hospital) or day-to-day expenses. The scheme pays hospital costs, but there may be co-payments for specific procedures. Out-of-hospital costs are paid by the plan, from a savings fund or a combination of both. Remember, oncology has a separate benefit once a tissue diagnosis is made. I’m often asked if patients can be admitted for investigations (mammogram or biopsy). The answer is no.

Important to know

More expensive plans also offer a safety net benefit, should you use all your day-to-day funds. Medical aid rates are negotiated amounts paid to healthcare providers. Private providers charge more than these rates, so you must know the extent of your claims payments. 

Most medical aid plans pay 100% of the rate, and there are more expensive plans that offer up to 300% of that medical aid rate. A top-up plan is recommended to prevent in-hospital claim shortfalls and help with procedure co-payments. Understanding these rates and how claims are processed helps you anticipate how future claims will be paid, enabling you to choose the right plan for your needs.    

PMBs

All medical aids have to cover certain conditions, treatments, and medicines. These are prescribed minimum benefits (PMBs), ensuring you have access to essential healthcare services, regardless of your plan, for a list of chronic disorders (diabetes, asthma, cancer, etc.). PMBs are complicated to understand and you definitely need the help of a medical aid broker should they become a concern. 

A scheme can require you to use only listed medicines and certain network service providers when covering PMB conditions. PMBs may be refused during the waiting period if you have never belonged to a scheme or didn’t belong to a scheme for at least 90 days before you applied for a new membership.

If you have a chronic need outside of these PMB conditions, you may need to look at a plan with higher chronic benefits to get coverage.

When should you join a medical aid?

The idea is to do it as soon as you can. If you join before 30, when you’re supposedly healthy, you pay the least. Over 30, you’re penalised the older you get when you join. Before you join, you need to read carefully what you should declare about your health, habits, and family.

Who holds the trident? 

By the CMS’ regulations, SA medical aid schemes must have a minimum of 6 000 members to register. All bona fide schemes must be registered. Comparative medical scheme sizes are based on and determined by scheme membership or subscriber numbers.

While most of them are restricted medical schemes, quite a few are still classified as open. Restricted medical schemes aren’t accessible to the public at large; membership is limited to staff employed by certain companies or organisations in specific sectors, industries, groups, or companies. It can also apply to individuals who are in specific professions. 

In comparison, open or private medical schemes are designed for people who don’t qualify for restricted scheme membership but still want and need medical cover. Sometimes restricted schemes are managed by more extensive schemes. 

You want to compare various medical scheme options to help you make the right decision. Restricted, group or closed medical schemes’ monthly contributions are often less expensive than those of open or private schemes since employee membership may be compulsory. They are thus captive or guaranteed members, ensuring the scheme remains financially viable. Companies may subsidise member contributions. A T&C is sometimes companies contribute to a medical scheme that may only allow access to specific hospitals or levels of care.

Every medical aid plan has a list of medicines (a formulary) which they provide. Specific schemes also allow medicines not on that list, but you’ll get a co-payment if you use them.

You must make sure you register for chronic benefits, or the scheme will use your savings to pay for chronic medicines. This also applies to your chronic oncology endocrine medication, which you want to be taken out of your oncology benefit. This doesn’t mean that your other chronic medication can be taken out of your oncology basket.

Care programmes

Schemes offer specific care programmes to help members live with certain chronic illnesses like HIV, cancer, diabetes, and mental health. You register for a programme and then have access to additional, relevant benefits that may be offered.

Oncology benefits

Most schemes offer a separate benefit for oncology. Some plans only pay for PMB-related cancer treatments, and others have a limited amount for non-PMB care. Other plans may offer unlimited benefits but have a co-payment after a specified limit is used. Lastly, some plans have unlimited oncology, but only from network providers.

Preventative care

Schemes offer a range of preventative care benefits for detecting (and then treating) medical conditions early. Preventative care benefits pay for tests, screenings, and vaccinations to detect and prevent illnesses. Doing this will give you the best care as soon as possible.

Benefits such as flu injections, blood glucose and pressure tests, mammograms, Pap smears, and prostate screenings are all paid for by the scheme and not from your savings.

Some even offer child growth assessments and milestone tracking.

You may have to use network providers, but you can get a range of paid benefits such as GP, dental, and screening benefits.

You should investigate the value of these benefits, as they will aid in preventing more serious (and costly) conditions developing in years to come.

How medical scheme funding works

There are two main areas of funding: 

Risk pool

Part of your contribution goes into this funding pool. It’s designed to pay claims for all members of that plan. This allows for cross-subsidisation, where members at higher risk of having to claim are subsidised by those with lower claims risks. The fund size gives an idea of future claims, allowing the scheme to spread the risk it faces. This will allow for lower premiums and make that plan more affordable.

Savings pool 

If you’ve a plan with savings, then up to 25% of your premium goes into this fund to help you pay day-to-day healthcare costs. These funds are yours to help pay for nearly all your medical costs, except PMBs. The scheme will advance you (interest free) up to a year’s worth of these savings at the beginning of each calendar year. You can only use these funds to pay medical costs (not co-payments), and you can’t top-up a fund when savings are used up. 

You can roll over any balance at year-end. These savings can be seen as a compulsory loan, funded by adding amounts to the premium. Should you not need to spend the funds, you have no choice but to pay towards the savings. 

Rules to help the patient 

Having medical aid/insurance doesn’t mean all costs will be covered, a predetermined amount is covered. You need to check whether that amount is adequate for your needs. You are buying capped coverage. 

Remember, we all want to live in Atlantis, but some may have medical aids like the land of the crustaceans or deep ocean trenches. Wherever you live on the sea or the land, basic respect for the right to good health care is imperative. 

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