With medical scheme contributions increasing by more than inflation again, you may be forced to look for ways to reduce the cost of your cover. Picture: 123rf.com
With medical scheme contributions increasing by more than inflation again, you may be forced to look for ways to reduce the cost of your cover. Picture: 123rf.com

Medical schemes have announced increases for next year averaging about 9.1%, but depending on your option your increase could be as high as 12%.

These increases are likely to leave a hole in your budget and you may be thinking of ditching your cover. But remember your cover is insurance protecting you from catastrophic expenses if you are injured or suffer a severe illness, so it is an essential on your budget.

You can, however, trim it sensibly to make ends meet, health-care advisers say.

Choose a network option

One of the safest ways to reduce your health-care costs is to move to an option that restricts your choice of providers.

Tracy Janssens, branch head of health care at Alexander Forbes, says members, particularly those in metropolitan areas, can reduce their contributions by 10%-20% by limiting themselves to certain hospitals for planned procedures.

There are now about 65 "efficiency discounted options" across all schemes offering lower contributions if you use the network of hospitals with which the scheme has negotiated good rates.

The Government Employees Medical Scheme said at a recent briefing that members could save up to 25% on their contributions after the employer subsidy by moving from their middle-of-the-range "emerald option" to the "emerald value option".

Members on the value option are obliged to use hospitals in a network, a single GP and be referred to a specialist by that GP, otherwise benefits are the same.

If you are willing to limit your choice of doctors and pharmacies to those in a network, you can also consider cheaper "entry level" scheme options, though your cover may reduce in other ways, too.

Before you agree to a network option, check that the network providers are within an acceptable distance and if you are planning a family, undergoing a procedure or already consulting a specialist, ensure the doctors you want to use are covered, says Jacqui Nel, business unit head of health care at Aon SA.

Forgo some day-to-day cover

Moving to a cheaper medical scheme option is most likely to cost you in day-to-day cover, Janssens says.

Jill Larkan, head of health-care consulting at GTC, says cheaper options may have lower contribution rates to medical savings accounts - 10% or 15% of your reduced contributions instead of 25%. This could mean your medical savings don't last you through the year, so you will probably need to set aside some of your saved contributions for out-of-pocket payments.

Ditch above-threshold benefit

Comprehensive medical scheme options offer an above-threshold benefit that pays your day-to-day expenses when your savings are depleted and you have paid some claims in the "self-payment" gap.

Larkan says few members on comprehensive options use this benefit and you can save contributions by moving to an option that doesn't offer it.

Self-fund medicines

Moving to a cheaper option often means fewer chronic illnesses are covered and/or the list of medicines you can use is more restricted, Larkan says. If your chronic illness is one of the prescribed minimum benefits (PMBs) it must be covered regardless of your option, but there may be only one generic medicine for your condition on a cheaper plan.

You have to try the medicine or formulary and only if it doesn't work for you, can your doctor motivate an alternative.

If you or your dependants have a chronic condition that will not be covered by a cheaper option, consider the monthly contribution savings relative to the cost of self-funding that condition.

Consider gap cover

Moving to a cheaper option often means lower oncology benefits. Nel says a cheaper option may offer only the lowest tier of oncology treatment.

However, it is possible to top up oncology benefits with a gap cover insurance policy for less than it costs you to belong to a higher option.

Nel says she downgraded from a comprehensive option on Discovery Health Medical Scheme to a priority option, saving R1,400 a month. She took out gap cover for R240 a month to replace some of the benefits she'd lost and is self-insuring by putting the savings into her home loan.

Janssens says cheaper options often reimburse specialists who treat you in-hospital at a lower rate and this could leave you facing a bill for specialist treatment.

Lower-cost options may also impose co-payments or have exclusions on operations like knee and hip replacements.

Gap cover policies can provide cover for specialists' costs, co-payments and excluded procedures, Janssens says.

Take some calculated risks

Nel says when you downgrade there are risks. The PMBs give you some protection but an option offering cover in-hospital for PMBs only may not ventilate a premature baby under 1kg or pay for an elective hip or knee replacement, she cautions.

On cheaper options, your scheme may expect you to use state facilities for
oncology or kidney dialysis, she says.

But the risks of downgrading are not lifelong as medical schemes allow you to upgrade at the start of each year, she says.

If you give up some cover that will lead to shortfalls if you get cancer, are in an
accident, or need costly therapy after for example a hijacking, you should be in a position to carry some costs before you are able to upgrade again, Nel says.

Medical schemes are introducing very low-cost primary health-care options that do not cover you for hospitalisation but typically offer unlimited access to GPs, acute medicines, basic X-rays and blood tests. This cover is aimed at people who have not had medical scheme cover before, Janssens says.

She says you shouldn't consider one of these products because you should keep your private hospital cover. An entry-level scheme or bare-bones hospital plan is as low as you should go.

However, Larkan says if you are really in financial difficulty you could consider this kind of cover coupled with a large amount of insurance to provide the cash to pay for hospitalisation in an emergency.

Medical scheme money savers

• Medical schemes that charge contributions in line with your income are generally cheaper for low-income earners as they are subsidised by higher earners.

• Restricted schemes (for employees of a company or sector) are often cheaper than open schemes. Working couples should register on the scheme that offers the best value for money.

• Options aimed at students can offer cheaper cover for adult children.