A go-to guide for understanding your medical scheme option
Mark, why is understanding your medical scheme option so important?
“Members who are not certain quite what their chosen benefit option entitles them to are at risk of either not making full use of their benefits or, worse still, discovering that they don’t have adequate cover for their healthcare needs when they need it most. At Resolution Health we feel strongly that knowledge is power when it comes to medical scheme membership, and we therefore try to make information about our Scheme as accessible as possible. “
What do you think is one of the most common misconceptions about medical schemes?
It’s important to remember that medical schemes, by law, must operate as not-for-profit entities. There are instances where members misunderstand the difference between a medical scheme and its administrator. The money we as a medical scheme receive from membership contributions goes into a pool of funds that are used to cover the healthcare expenses claimed for by our members. Medical schemes are also required to build reserves so that there are funds available in case of unexpectedly high member claims. For this reason it is important to remember that Resolution Health as a medical scheme does not make a profit, although the company tasked with handling administration on behalf of the Scheme is permitted to operate for profit.”
Why can members only change options once a year?
“Members are not permitted to change their benefit options whenever the mood takes them. Of course the Scheme will consider allowing members to change option under very specific conditions, but these are the exception as opposed to the rule.”
“This is because it would become all too easy to buy up for that expensive procedure that is only covered on a higher option and then buy down again once the treatment is completed. This is important as every benefit option in terms of the Medical Scheme’s Act must be self-sustaining and if members were allowed to buy up and buy down at will, the members on the higher option would in essence be funding the care of those who bought up just for a procedure and then left again, without contributing to that option’s risk pool of funds. This would not be in the interests of all the members on that option who would invariably see the impact in their contribution increases at the end of the year.”
What should be considered when choosing an option?
“During the benefit option change season, medical scheme members are encouraged to consider not only their present state of health, but also take into account the types of age-related and hereditary conditions that they may require healthcare cover for in the coming year.”
“For people living with chronic health conditions, an important factor in deciding on a particular benefit option is whether this condition will be covered. 25 Chronic conditions are covered as Prescribed Minimum Benefits (PMBs) in terms of the Medical Schemes Act, which medical schemes must cover irrespective of the member’s chosen benefit option. Resolution Health covers 28 conditions on the Foundation, Hospital, Progressive Flex and Progressive Flex Plus options with a wider range of chronic conditions on our more comprehensive Millennium, Millennium Select and Supreme benefit options.”
“It’s important that you as a member make every effort to find out as much as possible about your chosen benefit option. Ask the Scheme for more information if you are unsure of anything or consult a healthcare broker annually to discuss your changing healthcare needs.”
What kinds of common mistakes do members make when choosing an option?
“It’s important to understand the difference between a traditional benefit option and a new generation option. On a traditional option, you have access to a set list of benefits over a one-year period and these are funded out of the risk pool of the medical scheme. On new generation options, like our Millennium and Millennium Select options, a portion of the member’s premiums are set aside and put into a saving account in addition to set annual benefit limits.”
The savings portion of new generation options can be used to fund day-to-day healthcare expenditure such as visits to general practitioners, specialists and obtaining over-the-counter medication. This portion of the member’s funds cannot be used for cross-subsidisation of other members’ claims, and any leftover savings can be accumulated from year to year. It’s important to highlight that by law co-payments can’t be funded from the medical savings account.
It’s also important to remember that traditional options don’t allow for a roll-over of benefits that accumulate year-on-year, so not making use of benefits now does not mean you will have double the benefits next year.”
What advice do you have for members choosing their 2018 benefit option?
“Perhaps the most critical advice for anyone joining a medical scheme or choosing an option, particularly if you are unfamiliar with how the industry works, is to get the help of a trusted healthcare broker. This will help you to understand exactly what benefits you will be paying for and whether the option you have in mind is appropriate for your needs.