The rules of medical schemes often are complex and with more than 83 medical schemes in South Africa it is important to choose the right scheme for you and your family.
Philip Ferreira, a financial planner, told IOL that if people want to get more value for their money, they have to know their rights, understand their medical schemes and be aware of their health requirements. Ferreira said it is not always easy to understand a medical scheme, as the rules can be quite technical.
According to Ferreira, the general misconception is that medical funds often do not pay their members’ claims. According to the Council for Medical Schemes (CMS), the regulator of the medical fund industry, medical funds received more than R129 billion in contributions in 2013 compared with the more than R112 billion paid out in claims.
Ferreira said that a misconception also exists that medical funds make a lot of money out of their members. According to him, medical funds are not allowed to make a profit as any surplus accrued has to be applied as reserves or members’ contributions have to be decreased in the next year.
Ferreira advised consumers to consult the CMS’s annual reports for information about the different medical funds. The reports provide information on, among other things, how many members die respective medical funds have; the level of their reserves; how many contributions the funds collect annually; and how many claims are paid out.
According to Ferreira, it is very important to know certain things regarding a medical fund’s benefits. Medical schemes are compelled to cover their members for prescribed minimum benefits (PMBs). The PMBs is a range of benefits that ensures that all members of medical schemes have access to certain health services.
According to the CMS, 8,7 million South Africans are members of medical schemes. On 31 December 2013 there were 87 registered medical funds. Over the past decade the number of medical funds decreased from 133 to 87.
Daniel Lehutjo, acting executive officer and registrar of the CMS, said that it is very important to choose the correct benefit option, not only according to price, but also by doing research.
“It is essential for main members to read through all material provided by the funds and familiarise themselves with new benefit options. Make sure you understand how the benefit options work and choose a plan according to your health care requirements and what you can afford. If you are unsure, contact the scheme so that they can explain any changes, limits, benefits and other relevant information to you.”
Lehutjo said that many people prefer to use an agent or a broker. “Remember, it is not mandatory to use a broker, but if you do, you have to remember to make sure that the person is accredited with the CMS and that your choice of scheme and benefit option is based on informed approval.”
According to Lehutjo, there are a few basic steps in choosing the right medical fund. “Identify a few schemes and request information about the specific funds’ benefits, contributions, limitations and exclusions. Compare the information and see which fund meets your requirements.”
Lehutjo said it is also important to find out what the respective schemes’ reserves are as well as their expenditure not related to health, such as administrative costs. “Make sure you understand what prescribed minimum benefits are and under what circumstances the schemes offer the specific cover. You can also look at the funds’ designated service providers, how close they are to you as well as other networks that provide benefits to members,” Lehutjo said.
IOL: “Getting value from your medical scheme” – http://www.iol.co.za/business/personal-finance/getting-value-from-your-medical-scheme-1.1571051#.VMZ6ZP7Ldgk
Council for Medical Schemes – https://www.medicalschemes.com/Default.aspx