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Your clients’ medical aid should cater for their changing needs

01 November 2012 Peter Jordan, Fedhealth Medical Scheme

As 2012 draws to a close South Africa’s medical schemes are publishing their 2013 benefit increases. Your clients should take this opportunity to re-assess their medical aid benefit structures and determine whether their current arrangement meets their age, family composition and health status requirements.

"A member selecting an option based on affordability rather than healthcare needs should be made fully aware of the risk of having to cover certain healthcare costs out of their own pockets,” says Peter Jordan, Principal Officer of Fedhealth Medical Scheme.

The "option” is not at fault

"Members on inappropriate options often blame the scheme for what they perceive to be inferior benefits rather than acknowledging that the scheme is only providing benefits that match their level of monthly contributions”.

Your clients must remember that price cannot be the only key determinant. "It is important to look at service in terms of how claims are paid,” he says. "Superior call centres as well as dedicated client liaison officers that allow medical schemes to meet with clients and resolve member problems are essential”.

Vital role of advisers

Intermediaries play a vital educational role in assisting clients to manage their medical scheme expenses more effectively. They also guide clients as to the medical scheme option that is most suited to their needs. When discussing options the intermediary can confirm the financial stability of the scheme under consideration, including the credit rating and solvency.

"All schemes are required by law to maintain reserves of at least 25% of total contributions,” says Jordan. "Global Credit Rating (GCR) is a good indicator of any scheme’s claims paying ability, with ratings of AA and AA- considered acceptable”.

Understanding rates and limits

The level of cover that clients receive is another important consideration. Members must be informed of – and understand – the reimbursement rates when it comes to specialist fees, for example. It is also important to check the benefit limits on certain options to ensure appropriate cover.

Jordan urges brokers to ensure that their clients understand which claims get paid from what benefits. Members need to understand where money is drawn from. For example: Does the scheme pay for certain out-of-hospital benefits from risk or savings? A thorough understanding of payment procedures will enable your clients to make the most of their available benefits.

On exclusions and waiting periods

Brokers should also ensure that their clients understand the pre-exclusion clause and its likely impact. While medical schemes are not allowed to exclude any pre-existing conditions, they can impose a waiting period of up to 12 months on all claims related to a specific condition.

Current legislation hinges on whether members have had more than a 90-day break in cover between their previous scheme and the scheme they wish to join. If they have a break in excess of 90 days, then the scheme can apply a three month general waiting period as well as up to 12 month pre-existing condition-specific exclusion which can also be applied to PMB conditions. If there is less than a 90-day break in cover, then full inter-changeability applies.

Should a member have more than two years continuous cover, the scheme can only apply a three month general waiting period. However, if the member has less than two years continuous cover, the scheme can apply up to 12 months pre-existing condition-specific exclusions.

The dreaded "late joiner” penalty

"A late joiner penalty is applied to people who join a medical aid for the first time after the age of 35. It is another way of encouraging people to join the system earlier in life and to ensure medical sustainability based on the fact that the young and healthy subsidise the elderly,” concludes Jordan.

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