There are a number of widely believed myths about medical schemes in South Africa. This article will give you the truth behind the myths.
Myth: My applications can be turned down by a scheme
Provided you pay the monthly fees, the scheme cannot decline your application. They can implement a 12-month waiting period for specific conditions or a standard 3-month waiting period for all claims. They are also entitled to charge a late joining penalty.
Myth: Medical schemes are profitable
By nature and by law, medical schemes are non-profit institutions runs by trustees. They could, however, be part of a larger profitable company such as an insurance company. In order to remain classified as a medical scheme, they would have to continue to operate as a non-profit.
Myth: I will not have any cover during a 3-month waiting period
General claims will not be entertained but emergencies such as trauma will be covered.
Myth: SA has one of the highest rates of medical inflation
Sadly, medical inflation is a problem in most parts of the world. For well over a decade, medical inflation has averaged roughly 2% more than the CPI. This is not dramatically different from other parts of the world.
Myth: A medical scheme and medical insurance are the same product
Medical insurance is designed to provide for lost income in the case of medical needs and does not fall under the Medical Schemes Act.
Myth: If I have 100% cover from my medical scheme I will not be liable for any medical costs
This myth could end up costing you a lot of money. The cover would be based on the â€œmedical fund tariffâ€ which is generally significantly less than private doctors and healthcare costs. You would be required to cover the difference between the two.
Myth: The scheme can dictate that I use specific providers or network hospitals
Again, this is not true. They can make these hospitals more financially attractive but they cannot force you to use them. If you choose not to, however, you will be responsible for the difference in the costs.
Myth: The scheme can dictate the medication I use
As with hospitals, they can make specific recommendations more attractive but you are free to choose. As with the above, you will have to cover the cost of the difference.
Myth: Pensioners will pay less for scheme membership
Pensioners tend to be higher cost members to the scheme so it would not make financial sense to discount their contribution. The MSA has prohibited this practice.
Myth: My membership contribution has to be subsidised by my employer
While the employer has this option in order to make the package more attractive, they are by no means obligated to do so.
Myth: My parents are not allowed to be on my scheme
Provided that you can prove that they are financially dependent on you, they will be allowed to be added as dependents.
Myth: Exclusions for pre-existing conditions can be permanent
Provided you were honest and informed the scheme of the condition, the maximum exclusion period is 12 months.
Myth: Hospital plans only cover hospitalisation and in-hospital treatment
That is the main aim but they are also legally required to cover 25 chronic conditions. The plan may also allow for doctor visits to renew the chronic medication, normally twice a year.
Myth: Options can be changed as and when I wish
Most schemes only allow for plan changes once a year. This is in order to keep administrative costs down.
Myth: Membership of a scheme cannot be terminated by the scheme
If it has been proved you made fraudulent claims or you no longer pay the contributions, they can indeed terminate your membership.
If there are complications from elective surgery I will have to pay
Septicemia, even if as a result of an elective procedure, falls under the prescribed minimum benefit and therefore will be covered by the scheme.
Myth: If I run out of benefits I can no longer claim until the next year
In-hospital treatment will still be covered but if your savings account runs out you will have to pay for day to day costs. You can apply for relief which will be granted under certain circumstances.
Myth: Cancer is always covered under the prescribed minimum benefits
This is not always the case. Some cancers, when advanced, are determined to be untreatable and will not be covered. Different schemes have different rules regarding oncology claims.
Myth: Schemes can take a very long time to payout
The regulations dictate that a scheme has a maximum of 30 days to make payment. That is from the date they receive all the necessary paperwork for the claim.
Myth: The money in the medical savings account is mine
In theory yes, it is yours but only for the purposes for which the savings account is designed, It cannot be taken out or used for any other purpose. If there is money on the account when you leave the scheme, they have four months to pay it back to you.