It's enough to make you sick: medaid costs rocket. Why?
With a premium increase of 104.87%, the costs of medical schemes outstrip salary increases
Medical aids are “becoming less and less affordable” for the middle-class South African, a healthcare expert said after increases for next year were announced.
Most local medical aids have announced their increases for next year, with the average spike being about 9%, said Victor Crouser of Alexander Forbes Health.
People were being squeezed further with the petrol price and school fees rising.
According to Jill Larkan, head of healthcare consulting at GTC, a financial services firm, the average annual medical aid premium increased 104.87% cumulatively from 2006 to 2016, which is more than the increase in salaries.
Crouser said healthcare inflation rises above normal consumer inflation every year. This is a worldwide phenomenon, with health costs globally climbing between 3% and 4% above ordinary inflation.
“One of reasons health costs go up every year is technology: new, more expensive drugs and new, more expensive procedures using new patented technology.
“Health is the only field where new technology makes things more expensive,” said Crouser.
For example, a new, lower-risk prostate surgery using robotic arms guided by surgeons has increased the cost of these operations by 174% between 2011 and 2017, according to Discovery Health Medical Scheme.
What also increases costs is that more medical aid members are getting sick more often and spending more time in hospitals, the Health Market Inquiry found when it spent four years looking at the rising costs of private healthcare.
Medical aids then spend more every year per person and have to push up premiums.
Discovery Health said it estimates total medical inflation for 2018 is between 11.2% and 12.2%.
It is common for people to find cheaper plans to mitigate rising costs.
They can make changes to their scheme for next year between now and mid-December, but Crouser warned that getting a cheaper plan did not always save money in the long run because it could mean more co-payments for hospital and out-of-hospital procedures.
The people facing the highest increase were those earning R5,330 or less a month and were on the Discovery entry-level Keycare Access plan. It has increased 20% from R697 to R839 a month, since the plan now offers private care and no more use of state hospitals, as it once required.
Medshield medical aid has the second-highest increase at 14%.
But Crouser said it was not just the percentage-point increase that one should look at.
“Medshield have had better cheap plans in past few years so the increase may be coming off a lower price,” he said.
Bonitas’s average increase is 8.9% and Discovery Health increases are between 8.9% and 9.2%.
Fedhealth’s average increase is 8.5%, while Sizwe medical aid’s average increase is 6.1% and Thebemed’s is 6.5%.
For those wishing to change plans, Larkan and Crouser have the following advice:
If you downgrade, you may need gap cover
If you get a cheaper plan for next year, you will also have less money for in-hospital and expensive treatments, and for visiting the GP or seeing the dentist.
Larkin said: “If you are downgrading, you must ensure you get gap cover.” It is an insurance policy of between R100 and R200 a month per person that pays the difference (or some of the difference) between what the medical aid will pay doctors treating patients in hospitals and what they charge.
It makes up for the lower hospital benefits offered by the cheaper plan, but doesn’t help with day-to-day expenses such as medicine and optometry.
Do the arithmetic or ask your broker to do it
If you need to upgrade to a more expensive medical plan to get your unusual medication covered, and your medicine costs R2,000 a month but upgrading is R1,000 a month, it makes sense to upgrade.
But if your medication is R500 and an upgrade is R2,200, it may not be worth it.
This is where a broker can help choose the best plan, taking into account the tests, drugs and specialist visits needed each year. Some brokers have sophisticated calculators to do this.
Check out ways to save with network plans
Many medical aid plans make members use specific hospitals or doctors called designated service providers (DSPs). This allows them to negotiate bulk discounts with hospital groups or doctors and pass on the discounts to its members. Make sure you are happy with the hospitals provided. Many of Discovery Health Medical Scheme plans now insist on the use of network hospitals.
Ask Google or a get a list from a medical aid
There are 26 common chronic conditions known as prescribed minimum benefits that need to be paid “in full” no matter the cost, with some restrictions on the medications that must be provided. Make sure your condition is being correctly covered and you are not using day-to-day benefits for medicines and procedures.
Register your chronic condition
There are 26 chronic conditions that are covered in full (only certain medication) no matter the cost. These include high cholesterol, high blood pressure, diabetes and rheumatoid arthritis.
Ensure your chronic condition is registered with your medical aid. It means medication, certain tests and even some doctor’s appointments will be paid out of the risk pool, leaving your day-to-day benefits intact. Otherwise you may be paying more than you need to.
Register your pregnancy with your medical aid because this it often gives the mother-to-be more benefits.
100% does not mean 100%
Many members believe their medical scheme should cover the doctor’s fee in full, and are often shocked to learn this is not the case.
If your medical aid says it pays 100% of bills, this does not necessarily mean it pays the entire bill.
The 100% rate merely means the scheme pays 100% of its own rate. This is the amount the medical aid has decided it pays a specialist or GP for a visit or procedure. This is often less than what the doctor charges, leaving a co-payment for the patient.
A 200% rate means the medical aid pays more towards bills, but it still may not cover the whole bill.
A 300% rate is even better cover and is usually reserved for the more expensive plans.
Beware of misunderstanding the oft-used “100% of scheme tariff/rate”. This does not mean your healthcare provider will be paid in full.
Check out different offerings
Some medical aids have become innovative, such as Fedhealth which has a new system that only charges a member for day-to-day costs, like doctor’s visits and dentistry, if they use them. If they have no day-to-day expenses their premium is lower.
Most hospital visits need pre-authorisation
Not doing this can lead to medical aids refusing to pay for certain bills.
The few hours reviewing your medical aid plan and benefits and calling your broker can save a lot of money and stress in the following year.