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Weigh up the pros and cons of upgrading, downgrading

It’s once again that time of year when medical aid increases for the year ahead are announced. This year, however, is a different medical landscape compared to just two years ago. Last year was an aberration as medical aid increases were frozen and postponed but just how are medical aids reacting to this “reset”?

The past year has been a tough one financially for many as a result of job losses which means they will be forced to adjust their medical expenses accordingly. Others have been directly impacted by Covid-19 — and the possible medical impact of long Covid. As financial advisor Dawn Ridler, the founder of Kerenga Wealth Ecology, points out, while medical aids have seen a substantial increase in costs in some areas, this has been offset by the postponement of elective surgeries, although these can’t be postponed forever.

“Medical aid contributions form a significant portion of most people’s monthly budget so it’s worth taking time every year to check you’re on the right plan, or even the right medial aid,” says Ridler, adding it also helps to understand the terms and conditions medical aids operate under before making a knee-jerk reaction that could be costly to undo.

“Bear in mind you can’t be refused membership of a

medical aid — unless you have defrauded them — but if you join later in life over the age of 35, you can and usually are penalised with an increased premium,” she explains.

The second thing to remember is medical aids can impose a general three-month exclusion, during which you will pay premiums, but cannot make claims, although there are exceptions, she says.

Third, medical schemes can impose a 12-month “condition specific” exclusion where you cannot claim. “For example if you are on dialysis you may get a 12-month exclusion,” she says. “This is a good example of why you don’t change medical aid schemes on a whim. All of these ‘penalties’ can apply if you change medical schemes, so it’s a good idea to get advice from your financial planner before doing so.”

You can’t be a member of two medical schemes at any one time so you also can’t cover yourself that way, she says.

Medical aid increases for 2022 are not yet back to normal. While some schemes have yet to announce their contribution increases, Discovery and Momentum have both announced a delay in increases until next year. Discovery announced a 7.9% increase next May which translates into a 2.9% percent this year and 5.3% increase in 2022. Medshield, which announced a 5.2% increase, Bonitas, which announced a 4.8% increase, and Bestmed, which announced a 3.9% increase, will see their annual contribution kick off as normal in January.

By around mid-November every year members need to decide which plan within their medical aid scheme they want to be on, explains Ridler. “Much of that decision is going to be financial, but still weigh up the pros and cons of upgrading or downgrading your scheme given that in most instances you can only change this once a year if your general medical condition changes.”

It can make sense to use a plan within the scheme’s network if you can save enough on your premium to pay for the gap cover, she reveals, adding that your closest or preferred hospital may be on their network already.

However, if you really want a better understanding of how medical aids work, you need to get your head around prescribed minimum benefits (PMBs), she suggests. For example, the Covid-19 test only becomes a PMB if it is positive.

“That list and explanation

should be on your medical aid portal, or look up prescribed minimum benefits on the Council for Medical Schemes’ website for good information.”

Another consideration in the annual medical plan choice is gap cover. “Ask your financial planner to find the right fit of plan for your medical aid. Asking how many gap cover plans they offer is not out of place given it’s important to find the right fit rather than the only one your broker is accredited to.”

It might make sense to have the same gap cover as your medical aid, Ridler says, because the cover becomes seamless, and you don’t have to make upfront payments and claim back later.

“It’s not fun having to whip out your credit card to pay for a CT scan when you’re writhing in agony and on your way to theatre,” she explains, adding that gap covers have the same waiting periods and condition specific periods medical aids do, so, pick once if you can.

IT HELPS TO UNDERSTAND THE TERMS AND CONDITIONS MEDICAL AIDS OPERATE UNDER BEFORE MAKING A KNEE-JERK REACTION

MEDICAL COVER OPTIONS FOR 2022

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2021-10-21T07:00:00.0000000Z

2021-10-21T07:00:00.0000000Z

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