Need help choosing the right medical-aid option for 2022?

Choosing the right medical scheme option for 2022 is very important as we have seen during the past two years of the pandemic.

Consumers have until the beginning of December to make this important decision, which will affect the healthcare benefits they can afford next year.

The pandemic has also affected many consumers’ pockets and this will doubtlessly also influence their decisions to cut costs while still ensuring access to quality private healthcare when they need it. During this time, medical schemes will also announce their premium increases and benefit changes for 2022.

Private healthcare costs have doubled between 2000 to 2012 and this cost trends predicts that it will double again by 2028.

“There are many complex reasons for this upward trajectory. The most important reason is that, unlike the pharmaceutical industry, the healthcare provider industry has no pricing regulation,” Martin Rimmer, CEO of Sirago Underwriting Managers, says.

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Medical scheme hyperinflation

South Africa has a dire shortage of healthcare professionals which means that specialists can charge any rate, often more than 300% to 500% higher than the rate paid by medical schemes.

“While medical scheme contributions increase every year to keep pace with healthcare hyperinflation, the benefits are decreasing.”

Rimmer says this means that many medical scheme members are paying more for the same or less medical scheme benefits. They are also facing greater out-of-pocket healthcare expenditure than ever before, especially where consumers have been forced to buy down on cover and benefits due to affordability challenges.

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Gap Cover

This growing trend is illustrated by the growing amount of gap claims values. Rimmer says Sirago sees a marked increase in the shortfalls between what medical schemes pay compared to what healthcare providers charge for in-hospital procedures.

“While the average gap claim is between R10,000 to R20,000, we see the frequency of mega claims in excess of R40,000 daily for tariff shortfalls not covered by medical schemes that members would have to pay from their own pockets if they did not have gap insurance.”

Rimmer points out that not only members on lower benefit options have to deal with these shortfalls as even members on comprehensive, top of the range medical scheme benefit options have to deal with onerous tariff shortfalls for in-hospital procedures.

Medical scheme members can now change their medical scheme options for 2022 and many members are looking to buy down on their cover in the current environment where private healthcare costs are in an unsustainable upward spiral.

They will then take on more of their day-to-day primary healthcare expenditure as out-of-pocket costs, while maintaining access to private healthcare for any hospitalisation or serious future health crisis.

“They have to consider many interconnected variables with any benefit or option change, taking into consideration their personal needs, claims history, pre-existing health conditions and affordability, as well as any future health risks.”

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What to consider when choosing a medical scheme benefit option

Rimmer’s advice is to work with your professional healthcare broker to devise the best plan to ensure that your healthcare needs are covered and that any change will not leave you compromised or facing hefty out of pocket expenses that you cannot afford.

Therefore, consider the following:

• Your current day-to-day expenditure on healthcare and if your existing benefits provided sufficient cover or were you left out of pocket.
• If you or any dependants registered for a chronic condition and does it qualify under the 27 regulated chronic conditions or as an additional disease listing for cover, to help you consider whether the premium saving on a lower benefit option is worth the cost of the additional chronic medicine, which you may have to pay for yourself on a lower benefit option.
• If you are comfortable with the level of risk you can afford to take on as out-of-pocket costs as you normally receive less cover and benefits if you pay less.
• If you have gap cover to protect you from big shortfalls on in-hospital treatment and if you do not, speak to your broker about gap options suited to your needs.
• Benefit options that pay for prescribed minimum benefits (PMBs are conditions that medical schemes must pay for, at cost, according to regulations) only will also affect your pocket.
• remember that a plan that covers hospitalisation only means that you will have to pay for all day-to-day primary care, such as GP visits, dentistry, optometry, radiography and medication.
• If you consider a lower benefit option, do not move to another medical scheme to avoid any waiting periods, while using the opportunity to either buy-up within the scheme to acquire better benefits or to buy-down with the purpose of securing lower contributions.
• While most schemes only allow you to buy-up at the beginning of a benefit period, most will allow a buydown at any time during the year.
• Before buying down, make sure that your current benefit needs are comprehensively reviewed to ensure that buying down will not leave you out of pocket or without benefits.