If you belong to a medical aid scheme, here’s a question for you. Are you confident you are on the correct plan and getting the most bang for your buck (let alone choosing the right medical aid scheme)? It’s difficult to say for sure, isn’t it? First off, regardless of the scheme you belong to, your affordability places you squarely on a few rungs of the medical aid plan ladder. You don’t have much wiggle room. Above you are the medical aid plans you would like to upgrade to, but can’t, because they are too expensive, and below you are the plans you’ve chosen to ignore because your budget allows you to step right over them. Outside of what you can afford, what other criteria should you use to squeeze more out of your medical aid? In this blog post we’ll look at 3 questions you can ask yourself, which might allow you to get more mileage out of your medical aid
1. How flexible am I on the whole GP and hospital networking option?
To curb costs and be more attractive to new members, an increasing number of medical schemes are looking to offer significant discounts to members who are happy to see providers (Doctors and hospitals) within a network.
Why is the network option attractive to hospital providers and GPs?
Foot traffic…The scheme uses its scale to tie Doctors and hospitals into the network! The scheme then negotiates better rates with those providers in the network, and hands that discount back to its members. In return, the network can guarantee the hospitals and GPs foot traffic (more patients).
It’s a little like owning a retail shop in a very busy mall. You want the foot traffic in the mall because you need eyeballs looking at, as well as buying, your goods and so you might be willing to strike up a long-term deal with the landlord for that foot traffic.
2. Would you be happy with a network option for a 30% reduction in your monthly medical aid contributions?
The answer to that question probably lies in the answers to these two questions:
- Is my current GP in the network, and if not, would I be happy to change?
- Is there a network hospital near my house and work?
For those of us who really don’t mind which hospital we land up in, and which Doctor treats us, a network plan makes sense and we should take advantage of the discount on offer. If the restrictions of the network option make you feel uncomfortable, then rather stick with a plan that provides you with freedom of choice.
3. Do I really need a Medical Savings Account (MSA) or can I self-fund?
For those of you who aren’t familiar with the structure of medical aid benefits, they are broken up into two main categories. In-hospital benefits are designed to cover the cost of your in-hospital stay which can run into millions of Rand over a lengthy period, and out-of-hospital benefits like a GP visit which are normally paid from your medical savings account (MSA).
Most people who belong to medical schemes do so to cover the very real risk of landing up in hospital and not having the spare money to cover the exorbitant costs. Fewer people join a medical scheme to cover themselves for lesser costs like GP visits and the odd dentist appointment.
When does it make sense to self-fund?
If you have enough spare money lying around to cover out-of-hospital expenses, like a GP or dentist visit, then you don’t need a medical aid plan with a medical savings account. Rather opt for a plan that covers your in-hospital needs and self-fund.
The upside of self-funding:
- By self-funding you can probably negotiate cash payment deals with your provider. In most instances, providers will be happier to receive the money upfront than to wait and claim from your scheme.
- By self-funding you are in control of how your money is being invested.
- By self-funding you will be less inclined to be wasteful with the money. It’s easier to spend the “schemes” savings even if you know deep down it’s your money just being fronted to you.
When doesn’t it make sense to self-fund your out-of-hospital expenses?
- If you don’t have the money (the obvious reason)
- If you belong to a company that makes a significant contribution towards your medical aid.
In the case of a company contribution, you might be lucky enough to be getting a large subsidy from your employer, in which case it makes sense for you to have a medical savings account that is being sponsored by your employer.
4. Not Upgrading Your Medical Aid Plan But Taking Out An Inexpensive Medical Gap Cover Policy
It’s safe to say we are the “upgrade” generation. We are constantly upgrading our cellphones, cars, homes and just about everything else we own. Should you upgrade your medical aid even if you have more money to spend? It depends on what your concern is! If your primary concern is landing up in hospital and making sure you don’t get stuck with the bills, you might not need to upgrade your medical aid plan to get more additional in-hospital coverage. You might be able to boost your in-hospital coverage with a separate Medical Gap cover policy. If you haven’t taken the time to read our blog post on Medical Gap cover, you might want to take a few minutes to read it here.
Until next time
The Wise About Life Team