By Kevin Yeh, CFP® Now more than ever, corporate and retail clients, young and old, need good financial advice. Getting good advice on health insurance is very important, to ensure you get the coverage that meets with your health needs. There are three parts to consider: The Core (Medical Aid), the Supplement (Gap Cover), and the Alternative (Health Insurance). The Core: When you consider private healthcare financing, medical aid is the Core. In South Africa, medical schemes are regulated by the Medical Schemes Act, so all medical aid plans offered by medical schemes must provide the Prescribed Minimum Benefits (PMBs) as stipulated by the Act. PMB covers many critical medical conditions, conditions that either require hospitalisation or ongoing treatment (chronic health conditions such as diabetes). As medical aid is required by law to provide such comprehensive range of benefits, it is expensive. It is therefore important to understand and compare various medical aid plans, to get the best benefits from a reputable medical aid given your budget. Some medical aid plans are hospital plans that also provide chronic illness benefits, while other medical aid plans cover hospital stays, chronic conditions as well as day-to-day expenses such as GP visits. Medical aid plans range from R800 to R8,000 per member per month. Students can qualify for very affordable medical aid plans designed for students, at about R350 per month. Unlike other financial products, medical schemes are not-for-profit entities that are regulated to ensure they fulfil a social solidarity role, i.e. everyone benefits from the dependence individuals have on each other. If you join a medical aid for the first time in your life, has a break in your medical aid membership or move from one medical aid provider to another, the medical scheme can impose a three-month general waiting period. This protects other members of the medical scheme by ensuring that individuals aren’t able to make large claims shortly after joining and then cancelling their membership. During the general waiting period a beneficiary is not entitled to any benefits, in some instances not even Prescribed Minimum Benefits (PMBs) during this period. If a beneficiary submits claims during a general waiting period, they will not be paid. If you have known medical conditions (including pregnancy) when joining a medical aid, the medical scheme will impose a condition-specific waiting period. A condition-specific waiting period can last up to 12 months. During this time a beneficiary is not entitled to any benefits for a particular condition for which medical advice, diagnosis, care or treatment was recommended or received. If you join a medical aid after the age of 35; the medical scheme can impose a late-joiner penalty (LJP) if you have never been a medical aid member, or if you cannot prove medical scheme membership for a specified period of time since April 2001. This is to ensure fairness (whereby members who have been part of a scheme for years are not subsidising newer members who have not contributed to the scheme). In addition, it also ensures that medical schemes cannot deny anyone who wishes to join. The late-joiner penalty (LJP) depends on your age as well as the number of years you have been a member of a medical scheme. If you are over 35 and haven’t been on a medical aid, you may be charged a surcharge between 5% and 75% of the standard contribution. For people over 60 years old, this LJP can be as high as 75%. If you can afford medical aid, it is in your best interest to join one as early as you can, even if it is the most basic medical aid plan, so that you can avoid late-joiner penalty in the future. Always keep proof of your medical aid membership when you leave a medical aid provider. In South Africa it is illegal to have more than one medical aid plans. The Supplement: All medical aid plans have a long list of terms and conditions, none of them will pay all the bills in all of the circumstances. In fact, many members will find out after a hospital stay that they still need to pay out of their pocket thousands of rands to specialists or even the hospital. Gap cover products on the market cover many of these shortfalls. They are a cost effective way to supplement your medical aid plan. Gap cover can cost you between R100 to R400 per month. People above age 55 pay more for gap cover. The Alternative: If you cannot afford a medical aid plan, consider health insurance. Health insurance is not a medical aid. It is a short-term insurance product. While it covers certain medical events, it does not cover PMBs as stipulated by the Medical Schemes Act, thus less comprehensive in benefits. It also has an annual benefit limit of R200,000 to R1,000,000, capping the amount paid to a policyholder. This is unlike medical aid, which can pay claims into millions of rands. A health insurance plan can cost you between R160 to R1,300 per month for individuals, and between R500 to R2,000 per month for a family of five. What questions to ask about a healthcare product Medical aid, gap cover and health insurance products are by their very nature complex, have a long list of benefits, terms and conditions. You should ask the following questions to a provider or a financial advisor about a healthcare product, to understand it and decide whether to buy it:
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Choosing medical cover for your parents is no easy matter. There are several factors to consider such as their medical needs, their financial situation, the facilities close to them and what level of cover would be appropriate.Medical cover for a parent can cost anything between R1 000 and R5 000 per month, not taking into account late-joiner penalties. It depends on the level of cover (hospital plan or full medical scheme) you choose, and the specific option on the scheme. Many people who are healthy all their lives suddenly need extensive medical care when they become elderly. Private healthcare is enormously expensive, and few can afford to foot that bill themselves, even if they are wealthy. In fact, fewer than 10% of retired South Africans can afford to maintain their lifestyle post-retirement, and often high medical scheme contributions is one of the first casualties. Q. Can I put my parents on my scheme as dependants? A. Yes, you can. In fact, any member of your family can qualify as your dependant if you can prove that they are financially dependent on you and that you are liable for family care and support.This includes spouses/partners, parents, grandparents, children, step-children, the child of a spouse, grandchildren and in-laws. Once a child has left home and is self-sufficient and working, they can no longer be registered as a dependant. Q. Is a hospital plan enough for a retired person? A. It’s not ideal, but it is a lot better than no cover at all. Most really expensive medical treatments take place in hospital, and a hospital plan will cover your parents for 270 prescribed minimum benefits, which cover 90% of hospital procedures. But as one grows older, medication costs and certain out-of-hospital expenses can become substantial. Q. What is the principal difference between a full medical scheme and a hospital plan? A. A full medical scheme covers in-hospital and portions of out-of-hospital treatment, whereas most hospital plans only kick in once you are admitted to hospital. That means visits to the GP and all day-to-day medical treatment, as well as acute medication costs, will be for your own pocket.But the monthly contributions for hospital plan membership are also substantially lower than those for full medical scheme membership, which may be a consideration if your parents are under financial pressure. Q. Can a medical scheme refuse to accept my parent as a member? A. No, they can't, but they can subject them to waiting periods before they can claim: usually a three-month general waiting period, and also a 12-month condition-specific exclusion for the treatment of certain pre-existing conditions. Q. What is gap cover and how does it work? A. This pays a multiple of the difference between what your scheme pays, and what a private doctor or specialist charges in a hospital. This is an insurance product, and your parents need to belong to a scheme in order to qualify for gap cover. Just check, as some gap cover products have a cut-off age for applications. It is not expensive, and can make a real difference in a medical crisis. Q. What does it mean when it says a plan covers 100% or 200% of the medical fund rate? A. That is the rate that a scheme will pay for certain doctors, specialists or procedures. It might be substantially less than the rate private doctors or hospitals charge, so if you can afford it, take the 200% of medical fund rate, otherwise you could be landed with large co-payments for your parents. Q. How does the payment for chronic medication work? A. There are 25 chronic conditions for which all schemes (hospital plans included) have to pay. They usually have a medicines formulary listing the medications for which they will pay. These are often generics, which are much cheaper than brand medications – but they are equally effective.Some schemes have a fixed amount they will pay per condition. You need to register your parents with the scheme if they have been diagnosed with any of these chronic conditions before they can claim for this medication. Q. Does a full medical scheme pay for all medical treatment? A. No. If your medical savings account for day-to-day expenses has run out, you could find yourself in a self-payment gap. Until then, a scheme will pay for treatment at registered healthcare providers either partially or in full, depending on your option. Some schemes have above-threshold benefits if you have gone through your self-payment gap. Q. What is a designated service provider and how will it affect the choice of scheme? A. These healthcare providers (hospitals and private doctors) are on a network and undertake to charge the medical fund rates. So if you use network hospitals and doctors, there should be no co-payments. Healthcare providers outside this network could charge substantially more, and this will be for your own pocket. Check to see if there are any DSPs in the area where your parents live – there is no point in paying for medical scheme membership if they are unable to access the care. Q. What if they have never belonged to a scheme? A. If your parents have never belonged to a scheme, they can be made to pay up to 75% of the scheme contribution as an ongoing late-joiner penalty. Q. What if there has been a break in their medical scheme membership? A. The scheme will calculate the late-joiner penalty based in the number of years that your parents did/did not belong to a scheme. They will need to have the paperwork to prove their membership. Q. Does it cost anything to change schemes? A. No, it doesn't. The only possible costs are if you have to pay for something while your parents are subjected to a waiting period. Q. Do pensioners pay more or less on contributions than other medical scheme members? A. Pensioners pay the same as everyone else. A small number of options take income into account when calculating contributions – proof of income will have to be provided. Q. Do my parents’ former employer/s subsidise their medical scheme contributions? A. Some do (such as GEMS), but this is becoming rare in the private sector where, increasingly, your scheme contribution is part of your total cost-to-company package. Check whether your parents receive a subsidy from former employers – they could lose that if you put them onto your scheme. Q. Are my parents’ medical expenses tax deductible? A. Yes, if you are supporting them entirely. But this is not the case if they are furnishing their own tax returns (in which case they will probably not qualify as dependants on your scheme anyway). To get a quotes for suitable medical aid options please contact Namhla or Tammy or in our health and wellness department email :[email protected] tel no: (011) 658 - 1333 Source : Finance 24 Medical schemes have various benefit plans available to members. Members have to choose between hospital plans, hospital plans with a savings component (New Generation Options), traditional plans, comprehensive plans and network plans. If your savings benefit is quickly depleted at the beginning of the year and you have to pay for expenses out of your own pocket, or if your option is too expensive, it would be worthwhile to reconsider your particular medical plan. Certain schemes allow migration to other options mid-year, while others allow such changes only at the end of the year. Traditional Plans Cover almost all medical expenses and include benefits for in-hospital, day-to-day expenses and chronic medication, subject to the rules of the scheme. These plans are recommended for individuals or a family who wants comprehensive cover, but does not want a savings benefit on there option. These options still cover emergencies, hospitalisation, day-to-day expenses and chronic medication. Comprehensive Plans These options have a savings component and cover almost all medical expenses and include benefits for in-hospital, day-to-day expenses and chronic medication, subject to the rules of the scheme. These plans are recommended for individuals or a family who want comprehensive cover for emergencies, hospitalisation and day-to-day expenses and that makes use of quote a lot of chronic medication. Basic Hospital Plans Cover accounts submitted by service providers only for in-hospital expenses. You are responsible for your own day-to-day medical expenses, including emergency ward treatment. Hospital plans cost considerably less than comprehensive medical plans. However, Heydenrych recommends that you first determine the difference between the premium of a hospital plan and that of a comprehensive plan before making your choice. Please contact Namhla or Tammy in our Health Department, email [email protected] , to find out about different Medical aid options Source: medicalaid.co.za
Please contact Namhla or Tammy in our Health and Wellness Department, email [email protected] , if you have any queries about Bonitas enhancements Source: Bonitas
Please contact Namhla or Tammy in our Health and Wellness Department, email [email protected] , if you have any queries about Discovery Healthn enhancements
If you are a medical aid holder and would like an option upgrade from 1 January 2018 please note that all option upgrades have to be submitted by latest 30 November 2017 to us as your Broker. For advise on options please contact Namhla in our Health Department, email [email protected] tel no: (011) 658 - 1333 The International Travel Benefit offers medical emergency cover outside the borders of the Republic of South Africa to members for members on different medical aid plans. What is covered? The provider pays claims for emergency medical and related expenses, while on an insured journey, to the provider of the medical expenses. Cover is: Provided for up to 90 days per trip, irrespective of the number of trips made during the year Limited to R5 million per person up to a maximum of R10 million per family Subject to certain exclusions (such as pre-existing conditions and certain sports activities) The following is covered: • Emergency medical expenses • Medical evacuation and transport • Hospitalisation • Out-patient and in-patient treatment • Optical and dental expenses • Mandatory vaccine expenses • Travel assist services • Emergency telephone charges. • Limits, terms and conditions apply. These are outlined in the policy wording and documents. How to make sure you’re covered? Contact your medical aid provider to activate your international travel cover when you are planning to travel out of the country. Read the policy document carefully to ensure that you understand all the terms and conditions. To activate your International Travel Benefit cover please contact Namhla in our Health Department [email protected],tel (011)658 -1333 Source: Bonitas |
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