Teasing out actual medical aid increases
Medical schemes are announcing lower contribution increases for next year - but percentage increases are only one aspect of assessing the impact the annual changes will have on you.
And benefit cuts will also be less severe this year, says Victor Crouser, the coastal head of consultancy Alexander Forbes Healthcare - but only because schemes do not have much room left to cut. However, members need to watch out for increases in co-payments, deductibles and thresholds. And benefit limits that stay the same are a reduction in real terms, because their values have been eroded by inflation.
Medical services and supplies typically increase each year by two to three percentage points above inflation.
South Africa's largest medical scheme, Discovery, has implemented a weighted average increase of 7.9%, with members facing increases from 7.3% to 8.3%, depending on which options they have, Alexander Forbes Healthcare reports.
Other large open schemes have announced the following increases:
• Bonitas: an average increase of 8.7%, with increases ranging from 7.9% to 9.9%;
• Momentum Health: an average increase of 8.3%, with increases from 8.2% to 9.7%;
• Medshield: an average increase of 10.9%. Increases range from 10% to 13%;
• Resolution: an average of 9.6%;
• Bestmed: an across-the-board increase of 8.4%;
• Genesis: an average of 5.8%. The range of increases covers 5.3% to 6.1%; and
• LA Health: an average of 5.3%, with a range of 4% to 7%.
But when it comes to benefits, be aware of the following:
There has been no increase in oncology benefits to offset the ravages of inflation. The limit for fully-paid oncology treatment offered to Discovery members hasn't changed in eight years. Once reaching the limit of either R200 000 or R400 000, depending on the option they have chosen, members have to make a 20% co-payment.
Janette Clark, the manager of healthcare at insurer and risk consultant Aon South Africa, says Discovery claims that the cost of most members' cancer treatments fall within these limits.
Rajesh Patel, head of benefit and risk at the Board of Healthcare Funders, says that by not raising limits, schemes are pressuring oncologists to contain costs. His organisation represents schemes and administrators.
But patients needing treatment that exceeds their scheme's limits will find themselves with a mountain of bills to pay unless they have adequate gap cover or insurance for severe illness or dread disease.
No increase in chronic illness benefits. Patel says this is how schemes put pressure on pharmaceutical companies. However, chronic medicines are often prescribed minimum benefits - benefits your scheme is obliged, by law, to provide - so you are most likely to be affected if you have a less common chronic illness.
Clark says you should check whether your scheme has changed the medicines on its list for which it provides cover in full.
• No increase in benefits for MRI and CT scans.
• A sharp increase in the level at which above-threshold benefits become payable on more comprehensive options. In other words, the self-payment gap will widen, and you will have to pay more until the scheme resumes covering your medical costs.
Scheme options that offer to pay your essential medical expenses above a threshold typically cover these costs from a medical savings account.
When that is exhausted you have to pay some expenses yourself while in a self-payment gap. Beyond this threshold, the scheme again covers your expenses.
However, there is a plethora of rules as to which claims count towards the threshold and which claims above the threshold are paid. So the extra payments you make can end up being more than the self-payment gap. Clarke says examples are when you pay for over-the-counter medicine from your savings account or exceed the scheme's annual optical or dental limits.
Steep increases in deductibles and co-payments. Discovery has increased these by between 7.3% and 8.9%, Bonitas by an average of 6.2% and Momentum Health by between 6% and 10%.
Provider networks your scheme wants you to use. Crouser says members are buying options without being told what doctors or hospitals they have access to, and whether these options are practical.
For example, he says, if you live in a rural area, do not join an option that offers cover only if you are prepared to use a GP network in an urban area.
Schemes that have announced their plans for next year have also introduced more preventative healthcare benefits, such as screenings.
Patel says this is one move the schemes appear to be making to get their benefits more aligned for the government's proposed national health insurance.
But there is as yet little evidence of schemes consolidating their many options. In fact, Patel says, he initially expects an increase in options as schemes try to offer more discounted choices for members who agree to use networks.
Clark says the Medical Schemes Act needs to be amended before schemes can be forced to consolidate options or close loss-making comprehensive options or those for members who earn less.