Monday | 24 June | 2019
By Emsie Martin
As long as one is relatively healthy and only see a doctor now and then about a cold or flu, you can still pay for the visits out of your pocket. Medical emergencies and the treatment of some chronic illnesses, however, could sometimes cost you thousands of rands and put your family back financially. Looking at medical funds could be somewhat confusing. Perhaps it would be a good thing to get some clarity first about a few things.
Medical funds are expensive and it is important to make the right decision. You have to be sure that you can afford it and that the cover will be adequate.
Look at your needs
How old are you? Are you single? Do you have children? Are there hereditary diseases in the family? Do you follow a healthy lifestyle? Does anyone in the family suffer from a chronic disease?
Important things to find out
It could be a good idea to talk to an independent broker who does not focus on one fund only. It is important to find the middle course between what you can afford and your family’s needs.
What is the status of the fund’s reserves?
According to law a medical fund must hold at least 25% of its members’ annual contributions in reserve and invest it to make sure that there are funds to pay claims. You must also understand how to get the best value for your money from your chosen option.
The many options can be confusing
See what the day-to-day limits are and what your annual medical savings account with the fund is worth. With children in the house you can easily exhaust your benefits by the fourth month of the year if the savings account is only good for a small amount.
Look at what you will have to pay for out of your own pocket, at the scope of the hospital benefits and whether you are limited to specific hospitals.
It is also important to take a close look at how cancer treatment is determined and covered.
What is not covered?
There are usually two types of exclusion ─ those that apply for a period of less than a year if you are a new member, and those that are permanent. Before you join, make sure that everything you expect of the fund is included. You could be paying a stiff premium every month, only to find out that a disease you are diagnosed with is not covered by your medical fund.
What happens if you get seriously ill and you need a better option?
You can upgrade or downgrade your plan once a year. Option changes usually take effect on 1 January of the following year. Make very sure of the cover and premium for your new option before you change over.
If you get seriously ill during the course of the year and you want to upgrade your option, you will have to submit a written motivation to the medical fund’s board of trustees.
Is your family covered if you die?
They will be covered until the end of the last month for which you have paid a premium. Your dependants can elect to stay members and the monthly contribution will then be adjusted in accordance with the number of dependants.
What about a hospital plan?
Hospital plans are usually more affordable but it is important to remember that they only pay if you are hospitalised, subject to certain conditions. A hospital plan pays to provide for a loss of income because you are in hospital, but not for direct medical expenses.
Will it be a disadvantage if you join a medical aid at a higher age?
You can be penalised if you join a medical fund after the age of 35. Late entrance fines could mean higher monthly payments. If you have already been diagnosed with a chronic condition when you apply for membership, there could also be a three-month general waiting period or a 12-month condition-specific waiting period. During this period you will have to pay the full premium without being able to claim.
How is my premium determined?
Medical funds are non-profitable. Premiums are pooled to pay all healthcare costs (claims) as well as non-healthcare costs (e.g. administration and brokerage). The healthier, non-claiming members help to pay the claims of the older less-healthy members. This means that when you get sick, you will also be subsidised. Without cross-subsidisation medical funds will need higher premiums every year in order to stay viable and in so doing will become unaffordable with time.
Will medical tests be required before I join?
Depending on the information on your application form the fund may require further medical examinations as part of the underwriting process. It is important to declare all your health conditions or those for which you sought medical advice during the 12 months prior to your application. If you do not do this, your membership may be suspended or even cancelled.
How can I improve my membership?
Some medical funds reward their members with loyalty programmes.
These are general guidelines and may differ from fund to fund.