Choosing the right medical aid plan for 2020

CHOOSING THE RIGHT MEDICAL AID PLAN FOR 2020

It is that time of year to evaluate your healthcare arrangements in order to ensure the most appropriate cover for 2020. Choosing the right medical aid plan can be the most difficult and stressful thing to do and yet, it is the most critical decision for ensuring the right cover. Medical aid is the most expensive insurance and it is therefore important to choose the right cover to obtain value for your money. Failure to choose the right cover could result in over or under insurance, which could have consequences for you and your loved ones. Being over insured means, you are paying a higher premium for benefits you don’t currently need, whereas being under insured means you could be exposed in the event major medical expenses are incurred. This article discusses important factors to consider when choosing a medical aid plan and the different types of schemes available.

ANALYZING YOUR MEDICAL AID NEEDS

Below are some key factors to analyse which will help determine the right medical aid plan to select for you and your loved ones:

1 Hospital Need and Hospital Choice: Hospital Need refers to how much cover you will need for hospital procedures and admission in the event of hospitalization. Hospital Choice involves the choice between your preference for private hospitals only or whether you’re comfortable with network hospitals that come with the plan selected.

2 Chronic illness requirements: Chronic illness requirements determine the need for chronic medication and/or consultations. Key questions to consider are: Do any of my family members need medication on an ongoing basis? How much will the medication cost? Does my family have a history of inherited chronic diseases? Your answers to these questions will help determine your chronic illness requirements and subsequently the plan to select.

3 Hospital rates and co-payments: Although all medical aid schemes provide cover for hospital admissions, benefits do differ based on how much is paid to the treating doctors. Standard rates come with lower monthly premiums but will result in co-payments and potential shortfalls, which may require a gap cover benefit that pays the difference between what the doctor charges and what the medical aid is prepared to reimburse. Premium rates however will result in higher monthly premiums and lower or no co-payments, thus overcoming the need for a gap cover benefit.

4 Level of day to day cover: Day to day cover involves out-patient expenses for regular consultations such as GP, specialists, dental and optical and subsequent over-the-counter medication. To determine the right cover, you need to consider the level of these costs for you and your loved ones. If these costs are negligent, you may want to consider hospital cover only, resulting in a lower monthly premium. However, if your out-patient costs are high, a comprehensive cover might be more suitable.

5 Household budget: Choosing the right cover also involves a thorough analysis of your household budget to avoid the selected cover to compromise other monthly expenses such as groceries, school fees, transport, entertainment etc. Furthermore, some incomes may be eligible for income-based options or hospital plan options which help ensure low income earners to enjoy adequate health care regardless of their medical aid budget.

TYPES OF MEDICAL AID SCHEMES

Once your healthcare needs are defined, the next step is to decide on the right medical aid scheme. Below is a summary of different types of medical aid schemes that are available for your needs:

1 traditional plans: These plans provide a set amount of day-to-day scheme benefits per category such as GP visits, dental, optical benefits, etc. and are designed for families and individuals with specific healthcare needs.

2 Savings plans: These plans include a limited savings component to fund out-of-hospital expenses and are designed for those who require cover flexibility for basic out-of-hospital expenses.

3 Hospital plans: These plans primarily cover in-hospital treatments and are designed for those who require cover for major medical expenses and manage their out-of-hospital costs in their own capacity.

4 Hybrid plans: These plans offer a combination of day-to-day scheme benefits and savings for out-of-hospital expenses and are designed for those who require generous benefits for out-of-hospital expenses.

5 Threshold plans: These plans provide extensive cover for out-of-hospital expenses and are designed for those who generally have elevated out-of-hospital costs and/or who suffer chronic conditions.

To conclude, one needs to conduct a proper needs-analysis when choosing the right medical aid plan as it is extremely important that the plan you select best fits the requirements of you and your loved ones. There is a fine line to being over- or underinsured, but your needs-analysis will help uncover the benefits you require and will help you select the right plan. You may want to consult your broker or consultant for a proper needs-analysis and to obtain professional advice on selecting the right plan that best suits your needs.

Tsepo Mokake ǀ Employee Benefits & Investment Consulting New Business Consultant ǀ Minet Lesotho