Friday, March 5, 2010

Medical Aid... A Necessity?

I believe that its time to chat about medical aids and what we expect of a medical aid. Medical aids are like cars, the smaller and cheaper the car, the less “gadgets” or “add-ons” are available. So when paying R300 per month for a medical aid, you cannot expect to get the same benefits as a person that pays R3000 per month for a medical aid.

In saying the above I need to also explain that there’s benefits that schemes are obliged to pay even if you are on the cheapest option available. These benefits are called “Prescribed Minimum Benefits” , the there’s currently 270 of these and they are listed on the Council for Medical Schemes website:

Should you want me to discuss these in detail, I am quite happy to do so.

Let’s now talk about the various types of medical aids available. In general there’s Open Schemes and Closed Schemes.

Closed Schemes are schemes where membership is available to only certain members. Ie Sasolmed – only Sasol Employees can belong to Sasolmed.

Open schemes are schemes where membership is open to anyone that applies. Contributions can only take into account the option on the scheme selected, family size, income (this is not applicable on all medical schemes). One other factor that may affect your premium would be the “Late Joiner Penalty”, this only applies to people who have not been on medicals schemes for long periods of time.

I believe that it’s a necessity as care in public facilities are not what its meant to be due to shortage of skilled staff, facilities not well looked after etc. Hence the whole debate around NHI (National Health Insurance)

When selecting a medical scheme there’s some important factors that need to be taken into consideration.

• Solvency level of scheme

• Size of scheme – ie has membership grown?

• Claims paying ability of scheme

• Average age of the scheme, is the scheme attracting younger members?

• Average increases over last 5 years

• Administration, will it be easy to deal with the scheme, ie do they keep you updated with any status of your claims?

• Selecting an appropriate broker/ financial planner that knows the industry and can assist when you don’t understand the workings of a scheme, or when you struggle to get claims paid.
Don’t wait till you get sick to join the medical aid. Every medical scheme has the right to apply 3 months general waiting period and/or 12 month conditions specific exclusion.

What if you get in a car accident? Do you want to lie in a long que waiting to be treated in a public facility? If cost an issue, join a hospital cover option to start off with, at least you’ll have full cover when hospitilised.

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