It’s that time of the year when medical schemes change their prices and benefits for the following year. With the current financial pressure being experienced by all members of a medical scheme, it is imperative you understand what you are paying for and what you should be aware of when changing plans.

Medical scheme jargon can be very complicated and hard to understand. This can make choosing a plan very frustrating and sometimes costly. We would like to simplify this for you and assist in making your decision a little easier.

Your medical scheme benefits are normally referred to as Risk benefits and/or day-to-day benefits:

• Risk benefits refer to the amounts that schemes cover not related to your day-to-day benefits. This includes hospital claims, chronic and Prescribed Minimum Benefits.
• Day-to-day benefits include benefits payable from your Medical Savings account.

Risk benefits

• Hospital benefit

This benefit pays the costs when you are admitted into hospital for an emergency or planned/non-emergency treatment. Majority of plans have an unlimited benefit for hospital; however, the scheme may apply networks and specific limits on certain plans. Authorisation is required for hospitalisation and the rule of thumb is this should be obtained 72 hours after an emergency and 48 hours before a planned procedure.

• Emergency

For emergency treatment, the medical scheme is required to pay all services/treatments related to the emergency in full at any provider irrespective of cost.  

An emergency medical condition is the sudden and unexpected onset of a health condition that requires immediate medical and surgical treatment, where failure to provide medical or surgical treatment would result in serious impairment to bodily functions or would place the person’s life in serious jeopardy.

Medical schemes pay for the following medical services that you may receive in an emergency:

• Ambulance (or other medical transport)
• Hospital account
• Accounts from the doctor who admitted you to the hospital, the anesthetist, and any other healthcare provider that is approved

If your hospitalisation falls outside this definition mentioned above, it will be deemed as a planned procedure.  

• Planned procedure

For a planned procedure in-hospital or certain out-of-hospital procedures performed in a doctor’s room, registered day clinic or out-patient facility, this will be paid by the hospital benefit. As this is a planned procedure, your plan rules will apply. This means that the scheme rate will be applied and if your plan has network providers, these will need to be used to be covered in full.

The Scheme rate is a defined rate at which a medical scheme pays service providers. Medical Schemes negotiate with hospitals, GPs, specialists, pathologists, radiologists, and dentists to determine the amount the Scheme will pay per treatment. For all other providers, the amount scheme’s pay is set on an annual basis. This varies between schemes, so it’s important to obtain a quote and check with your scheme what will be paid. If the providers, such as surgeons and anesthetists, are not contracted to the medical scheme, co-payments may apply, and the member will be liable for the short fall.

Depending on your chosen plan, you may need to make use of specific hospitals, pharmacies, doctors, specialists or allied healthcare professionals in a network. Schemes have payment arrangements with these providers to ensure members get access to quality care at an affordable cost. By using network providers, you avoid having to pay additional costs and co-payments yourself.

• Chronic benefits

All medical schemes in South Africa cover a list of 27 chronic conditions, that are eligible for Prescribed Minimum Benefits (PMBs) and are common chronic conditions such as Asthma, Diabetes, Hypertension etc.  Which includes treatment and medication required for the maintenance of these chronic conditions. Your scheme may have specific providers you need to use in order to access full cover.  A full list of these and other information related to chronic is available on request from your medical scheme.

If you have a chronic condition, please choose your plan carefully as this will determine how your medication will be covered. Cover is subject to a formulary (list of medication) or a rand limit depending on the drug class that your medication falls into. The higher options provide cover for additional conditions if required.

If you, or one of your dependents, has a chronic condition that is covered by your scheme, please ensure that your treating doctor completes the chronic application form in order to register you for this benefit.

• Managed Care benefits

Managed healthcare is a management tool that is used in the private healthcare environment to manage the provision of care.  This relates to conditions such as Diabetes, Oncology and HIV treatment. These benefits are covered from the risk benefits, but members are required to be registered on these programs and provide treatment protocols to access these benefits.

• Prescribed Minimum Benefits (PMB)

In terms of the Medical Schemes Act of 1998 (Act No. 131 of 1998) and its Regulations, all medical schemes must cover the costs related to the diagnosis, treatment and care of:

An emergency medical condition

A defined list of 270 diagnoses

A defined list of 27 chronic conditions.

To access Prescribed Minimum Benefits (PMBs), there are rules defined by the Council for Medical Schemes (CMS) that apply:

• Your medical condition must qualify for cover and be part of the defined list of PMB conditions
• The treatment must match the treatments in the defined benefits
• You must use Designated Service Providers (DSPs) in the network. This does not apply in emergencies.
• Where appropriate and according to the Rules of the Scheme, you may be transferred to a hospital or other service providers in the scheme's network, once your condition has stabilised.
• If you do not use a DSP, schemes will pay a percentage of the account (usually 80%) and you will be responsible for the difference between what the scheme pays and the actual cost of your treatment.
• If your treatment doesn’t meet the above criteria, the scheme will pay according to your plan benefits.

Additional benefits

Medical schemes offer extra benefits to members, as screening benefits covering glucose, high blood pressure and cholesterol screening. Some schemes offer extra GP visits once your day-to-day benefits are depleted.  These benefits normally require you to use network providers or obtain authorisation from the scheme. Please ensure that you understand how to access these benefits in order to get access to the extra benefits.

All the benefits above are compulsory benefits and are the portion you pay the largest premium for. However, the benefits that members will use regularly would relate to day-to-day.

Day-to-day benefits

This is cover provided by a scheme for day-to-day expenses such as GP and specialist consultations, prescribed medication and procedures, pathology and radiology conducted out of hospital. This includes Casualty/ER 24 Trauma at a hospital.

Day to day is provided by different funding vehicles within each scheme, however, the most common are:

1. Hospital plans do not offer cover for day-to-day benefits.  Benefits are only available for in hospital treatment and chronic cover.
2. Network driven plans offer certain benefits unlimited at network providers. The scheme has payment arrangements with providers, and they can control costs with the arrangements. However, these plans will have medicine, radiology and pathology formulary’s which members need to adhere to in order not to pay in for any services.
3. Plans could also have a Medical Savings Account. This is a pre-allocated percentage of your contribution that is allocated to a savings account. The amount can vary between plans and schemes, however, the maximum percentage allowed is 25% of the total contribution. This amount can be upfronted to you for the full year and balances are carried over to the following year if the full amount is not used. The savings will be paid out tax-free to members should they leave the scheme and not join another plan with a savings allocation.
4. Some of the higher options on Medical Scheme’s offer members a Medical Savings Account and an Above Threshold Benefit (‘ATB’) The ATB is an extra portion of day-to-day benefits that members could access once the savings is depleted.
5. Certain benefits have limits imposed and these limits apply before and after the ATB. This means the limit is applied no matter which benefits you access i.e. savings or ATB.
6. Once the savings account has been exhausted, members will enter the self-payment gap where claims will be paid out of their own pocket. During this time, members need to submit the claims in order to close the self-payment gap. 
7. Once members have closed the self-payment gap, they will have access to the above threshold benefit where additional benefits will be available to them. The above threshold benefit may have a rand cap value depending on the family size and certain benefits.

There are also Loyalty/Wellness products offered by schemes to members, but these would come at an extra cost and are optional.

There are add-on products that we feel members should consider on top of their medical scheme. One such benefit is Gap cover.

Gap Cover is a short-term insurance product which can be purchased separately from your medical scheme and is an effective way to ensure that you are covered for hospital shortfalls. Which arise because there is no forced regulation on provider charges, medical schemes may only cover up to a certain rand value, and/or your medical scheme may impose co-payments and deductibles. Gap cover will assist in covering the resultant in-hospital shortfalls.

Connect with one of our NMG Healthcare consultants to assist you in understanding your medical scheme benefits.

NMG Consultants and Actuaries is an Authorised financial services providers t/a NMG Benefits.

The content in this communication is for information purposes and is not intended to be detailed advice, you should seek the advice of your physician or a qualified healthcare provider with any questions you may have regarding a medical condition.