How medical aids work

Introduction

Choosing the best medical aid for your needs is one of the most important decisions you need to take. The choice affects not only the level of your healthcare, but also has huge financial implications for you and your family.

Choosing the correct plan is a fine balance between your healthcare needs, your affordability and your risk aversion level. Since all three of these inputs are so personal to your individual situation, we cannot recommend a blanket “best” plan.

Although we have tried to simplify information as much a we can, we have not been able to avoid some of the necessary jargon, and we do not have full insight into how the schemes operate.

Forums

To add to the transparency, we have introduced Forums to the website, and we encourage you to participate. By offering you a forum for your own experience with a healthcare funding issue, and the specific scheme, we hope to add even more transparency to the healthcare system, as well as more accountability. We encourage you to participate and read the forums. You can find out more here.

Scheme Rate

This is the foundation block of how schemes pay for claims. Every healthcare “line item” has an IDC code, and each scheme sets the maximum price it will pay for that code. If your healthcare provider charges more than this scheme rate, you will have to pay the difference out of pocket.

There are two main exceptions to this:

• Some schemes pay at “200% scheme rate” or “300% scheme rate” on some plans. That means they those plans will pay a multiple of their basic scheme rate to the healthcare provider, thus minimising your out-of-pocket expenses.
• Some schemes guarantee that they will cover the healthcare cots of provider if the providers are part of the scheme’s network, or if the providers have a payment arrangement with the scheme. The actual rate the provider then charges is irrelevant to you

Lastly, if your plan offers an above threshold benefit, it is very likely that claims accumulate to the threshold at 100% scheme tariff only, regardless of the actual cost claimed.

PMBs

The medical aid sector is governed by the Medical Aid Schemes Act, and that Act directs medical aid schemes to pay for the diagnosis and treatment of 270 conditions according to certain guidelines, and without charging you the end user directly for the treatment.

In other words, when you get treated for any of the 270 conditions, the schemes have to cover your costs without asking you for a co-payment, and without using your medical aid savings.

These 270 conditions, known a Prescribed Minimum Benefits (PMBs) cause much problems and confusion, for schemes, healthcare providers and for you.

We are committed to using this website to offer as much transparency to PMBs as possible, while also pointing out their pitfalls. You can find a list of the PMBs here, a collection of all our PMB content here,and more general info on PMBs here.

Update: The government has indicated that it will re-look at the PMB legislation, and will implement changes as soon as March 2017.

Here is what you need to know now, applicable for now:

• The 270 conditions cover all life threatening conditions, as well as most cancers and other degenerative conditions.
• As a medical aid member, you are guaranteed in hospital and out of hospital treatment for these conditions.
• Only “treatable” cancers are considered PMBs. Read more here.
• Schemes can prescribe where you receive treatment for PMBs, and most have Designated Service Providers (DSPs) to offer this service. If you choose to not use a DSP for a PMB, you might be liable for extra costs, as schemes are not obligated to covers costs above those charged by the DSP. This is a very important caveat, since a lot of schemes/plan designate state hospitals as DSPs. Therefore, you might think you have coverage for private hospitals, but in fact if you are treated for a PMB you might be relegated to a state hospital, or have to co-pay for a private hospital treatment. You can read more about DSPs here.
• The Act pairs each PMB with the minimum treatment that must be covered by the scheme. Unfortunately, in most cases, this treatment is simply described under a blanket description of “Managed care”. In very simple terms, what this mostly means is that the scheme has to pay for the treatment that a public hospital would offer to a non-scheme member who suffered from the same condition.
  It is reasonable to assume that as a scheme paying member, you might want better, more advanced treatment. Be aware that this might cost you out-of-pocket. For more specific information on this, read about the obligations medical aid schemes have re PMBs.
• The good news is that you have to be offered treatment, including out-of-hospital treatment, for all PMB conditions, no matter what plan you are on. That means that if you are financially constrained, you can rest easy knowing that even the cheapest plans guarantee coverage and out-of-hospital treatment for many conditions that would otherwise be affordable to you.
• The bad news is that PMB coverage requires careful ongoing management from you the scheme member. You have to be very vigilant that you are getting the coverage that is due to you, that you are not co-paying, and that you are using the DSPs. There is more information on this on our website under each scheme, and you can also read all our PMB content here.

Types of plans

Hospital plans: these cover in-hospital costs only, as well as out-of-hospital costs for any approved PMB conditions (see above). Some schemes may offer some extra benefits like preventative care, standard dentistry etc.

Savings: some plans set aside a portion of your premium toward out-of-hospital or day-to-day costs. You usually get the full years value of the extra premiums available in January. Savings cannot be used by scheme to fund PMB benefits prescribed by law.

“Extended Funds”: Different schemes have different names for these, but essentially it is a “budget” that schemes allocate to you for day-to-day expenses.

Comprehensive plans: These plans usually offer a savings account (see above), and once that is depleted might force you to pay for out-of-hospital expenses out of pocket (self payment gap). However, after a while, when all the day-to-day claims that have been paid (either by scheme or by you) accumulate to a certain amount, the scheme starts paying all further claims once again. This is called “above threshold benefit”. Some plans limit this benefit, and some plans have it as unlimited, with sub-limits for various benefits. See more here.

Income based plans: Some plans are income based plans, which means that the premiums you pay as a member are adjusted on a sliding scale according to your income. The less you make, the less you pay. Schemes define “income” according to own rules, so check with the scheme.

Managed care

All schemes have managed care programs, which you need to join if you want to get the full benefits available for certain conditions. By joining such a program, you will most likely be assigned a case manager to help you manage your condition, get you the care that you need and ease the claim process.