Looking for a medical aid to suit your professional lifestyle? Here’s how you can get savvy with your choice of medical scheme and medical aid plan.
There are many different options when it comes to health cover, including medial aid, medical insurance and gap cover.
In South Africa, you can also choose between an open medical scheme and a restricted or closed medical scheme. Restricted medical schemes, such as Profmed, cater to a specific group of people. This could be based on an industry, or, in the case of our scheme, a specific qualification.
The benefit of a restricted medical aid scheme is that medical cover can be tailored to the specific needs of the member base and the scheme tends to have a much smaller member base than large open schemes. In Profmed’s case, this has allowed us to really support our members during the onset of the Covid-19 pandemic. With many of our professional members frontline healthcare workers, we increased the number of Covid-19 tests that the scheme covered, for example. A restricted scheme is always focusing on the current needs of its member base and adjusting benefits accordingly.
Here are 5 important considerations you should take when comparing medical aids (and benefit options):
1. Work out your budget. The general rule of thumb is that your medical aid contribution should not exceed 10% of your monthly income. Drawing up your monthly budget will help you to determine how much you can afford. The good news is that hospital plans can be very affordable and if you do not yet have a family and are an up-and-coming professional, this may be all you need. As your career progresses and your lifestyle needs change, you can move to a more comprehensive plan. The important thing is to join a medical scheme as soon as possible. Anyone joining a medical scheme for the first time after the age of 35 will be penalised with higher fees for the rest of their lives. This is true of any medical aid in South Africa. The reason for this is that the medical aid model is built around member reserves. If you only begin contributing to those reserves after 35, you will have to pay higher fees.
2. Assess your needs. Budget is important, but so are your health needs. If you are young, healthy, and independent, a hospital plan is an excellent and affordable way to join a medical scheme. However, if you are a parent or have a chronic illness, more comprehensive cover is the way to go. Most medical schemes offer a variety of benefit options, beginning with basic hospital cover and then adding different benefits. If a plan works with a network of hospitals there are also savings, provided you choose to go to a networked service provider.
If possible, consult with a financial advisor or medical broker who can help you compare your options. It’s impossible to predict future health problems, but as the Covid-19 pandemic has taught us, it’s important to plan for unplanned medical emergencies – particularly if you have dependents. A young family’s needs will also differ from the needs of a professional nearing retirement. Generally speaking, you need more medical cover the older you become.
3. Ensure value for money. Assessing medical schemes and member benefits is about more than what premiums cost – it’s about what your premium gets you in terms of value for money. For example, some medical schemes manage their costs (and can therefore offer lower premiums) by limiting payouts on certain costly procedures, such as elective joint replacement procedures and even certain cancer treatments. Be careful not to choose a scheme based on price alone. Be aware of your chosen benefit option’s limitations. Also make sure you investigate any other conditions of the scheme such as waiting periods on pre-existing health conditions.
4. Confirm co-payment amounts for each benefit option. Most medical aid plans have defined co-payments and sub-limits which means as a member you will need to pay the difference between what the medical aid covers (medical aid rates) and what the hospital and specialists charge.At Profmed, we have contracted with networked hospitals to reduce these co-payments. All of our Savvy options work with networked hospitals which reduces co-payments. In general, more affordable benefits generally require higher co-payments for specialists and hospital procedures, however. If you do not currently have any specialist medical needs a hospital plan or entry-level benefit plan could be perfect, and you could move to a more comprehensive plan as your needs change (thereby lowering your co-payments). All schemes have some co-payments in place, so just be aware of them and how they work so that you aren’t caught unaware.
5. Investigate the medical aid’s payment record. This is essential. The last thing you want is to pay your premiums and then discover your medical aid can’t pay for hospitalisation in the middle of a pandemic. The best way to ensure your premiums are safe is to check a scheme’s solvency ratio. According to South African law, schemes should have at least 25% of members’ annual contributions in reserve. You can request this information directly from the medical aid or through your broker or financial advisor.
For example, at Profmed, we have built up strong reserves by being responsible. The scheme is healthy, and this allowed us to support our members and pay out much higher Covid-19 claims than we expected (or budgeted for, given the unprecedented nature of the pandemic). We will continue to always act prudently to ensure that the scheme is in a strong financial position to support our members.