Medical Aid 2017-considering your options, what you need to know.

Gone are the days when most families simply stayed on the same medical aid plan and option type year in and year out. Medical Aid contributions now feature in the top 3 most expensive budget items for pre-retirement families and are probably the most expensive budget item for retired couples. For 2017, whilst South African CPI (inflation) is around 6% to 7%, medical aid increases are coming in on average at around 11%. As a result, medical aid members are having to carefully reconsider their options in order to remain within their budgets.

 

The following are some of the most important matters for consideration for those members who are considering changing from one scheme to another

  • Dates for upgrading or downgrading within your current Medical Scheme.
    • Discovery Heath
      • Upgrades must be submitted in writing to Discovery by no later than 15/12/2016.
      • Downgrades can be done at any time during the year.
    • Momentum Health
      • Upgrades must be submitted in writing to Momentum by no later than 21/11/2016.
      • Downgrades can be done at any time during the year.
    • Medihelp
      • Upgrades and downgrades must be submitted in writing by 9/12/2016
    • Bonitas (incorporating Liberty Medical scheme)
      • Upgrades must be submitted in writing by 15/12/2016.
      • Downgrades can be done at any time during the year.
    • Spectramed
      • Upgrades must be submitted in writing by 15/12/2016.
      • Downgrades can be done at any time during the year.
    • Changing from 1 Medical Aid to another (as an individually underwritten member.
      • Medical schemes are legally compelled to accept any applicant regardless of age or state of health. However, members need to be very careful when considering changing schemes as there can be extremely onerous conditions imposed by the Medical Scheme. Some of the factors to be considered are
        • Every individual (regardless of age) will have to do a comprehensive declaration of heath for themselves and each member of their family. Any pre-existing medical conditions will probably be specifically excluded for a period of 12 months. This infers a period of risk/self -insurance for impacted members
        • Individuals over the age of 35 will generally have a 3 month general waiting period imposed on their scheme. Again, this infers a total period of risk/self insurance.
        • Late joiner penalties apply to members over the age of 35 who cannot prove continuous membership of a South African medical scheme. The penalties become more onerous with age and duration of non-membership and remain with the member for their lifetimes. Moving from one Medical Aid scheme to another does not void the late joiner penalty.
        • Generally speaking, you want to be a member of one of the larger schemes which has a growing membership and a stable or reducing average age profile. Schemes which battle to attract new, younger members will naturally suffer from higher claims statistics as their membership ages because the sad reality is that with advancing age, comes greater medical conditions and costs.
        • Choose a scheme which is financially sound and which has a broad diversity of plan types as this will give greater optionality in future.
        • Choosing a Medical Aid scheme as an individual is a long term consideration and so clients must be careful not to choose a scheme which is unlikely to be able to adapt to both changing market and legislative situations and the broadly based needs of members over many years both pre and post retirement. Given that it is often onerous for members over the age of 35 to change medical aids, the decision as to which Medical Aid scheme you select is probably a 35 to 50 year decision profile. Be careful not to choose a medical scheme based purely on your current affordability and needs.
      • Summarised information on Medical Aid Schemes and the options and pricing for 2017. Bespoke Solutions have compiled summary documents for use by clients on the main medical aid schemes we represent. You can access this information on our website via the links below

 

Please note that Medical Aid schemes are often very technical and are accordingly difficult to assess relative to other schemes and options. This article is written to highlight important decision points and information clients need to access in order to make informed decisions. Often the assistance of an accredited Medical schemes adviser is necessary to assist clients in making the correct decisions. The opinions and points and summary brochures on different plan types are not client specific and the contents of this article and attachments cannot and should not be construed as advice.

 

Article written by Sabra and Jeremy Squier, Key Individuals, Squier Financial Services (Pty) Ltd, a registered Financial Services Provider and accredited Medical Schemes Council intermediary.