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As we come out of the winter months and the flu season, many of us have depleted our medical savings. While it’s too late to do anything about this year’s savings, there are things consumers could and should be doing to avoid this happening again next year.

 

Consumers need to break the medical savings abuse cycle

As soon as consumers realise that their medical savings is depleted before the end of the year, what usually happens is that they delay seeking the medical attention they require between the time that their medical savings runs out and 1 January of the following year.

They may for example, be tempted to leave that cavity in their tooth for a while and just ‘eat on the other side’ or put off their check-up with the gynae for a month or two. Maybe they even decide to forgo those monthly vitamins that they were paying for out of their medical savings. In doing so, by the time the new year presents itself, they find themselves with a ‘backlog’ of medical needs, some which by this stage require more medical care than if they had simply dealt with them when they occurred. The end result is that by February many have eaten into a large percentage of their annual medical savings allowance.

Ideally, when January comes around and medical schemes ‘reset’ their medical savings to its full amount for the new year, consumers should be in a position where they have no backlogged medical procedures to rush to. This sounds great, and makes a lot of sense, but how exactly can they pull this off?

 

Health first! Consumers should cut back on other expenses to proiritise their health between now and January

The goal is to remain healthy for the remainder of the year. Sounds obvious, doesn’t it? Instead of giving up those vitamins, consumers should rather give up on eating out? Looking after health needs in the short-term will help them to reduce their medical costs in the first quarter of next year and will help their medical savings to last longer. As part of a stay healthy plan, consumers should also remember to make use of their medical schemes preventative screening benefits and should focus on a healthy lifestyle which includes exercise, dieting and cutting back on bad habits like smoking and drinking. It is better for them to set aside that money as a medical saving for themselves while they are in a self-payment gap.

 

Consumers can reduce their medical costs by being smart

If consumers find themselves getting sick while in a self-payment gap, then they should consider the following ways to save on medical expenses during this period:

1. Not everything requires a doctor’s visit. In many cases, pharmacists are skilled enough to provide sound medical advice on problems such as rashes, colds or other minor everyday illnesses. Consumers should rather get an opinion from their pharmacist first before running up unnecessary doctors’ bills.
2. When consumers need over-the-counter medications such as headache tablets, vitamins, antacids or flu meds, they should first try purchase them from a supermarket rather than a pharmacy. This could save them heaps of money, as supermarkets buy in bulk and are able to pass on savings to their customers.
3. If consumers do have to spend money on medication, they should ask their doctor to prescribe a generic form of the medication needed. They should also then double check with their pharmacist that they are given the cheapest generic alternative available. Unless specifically ruled out by their doctor, they should opt for a generic as they are often a lot cheaper and do the same thing as the original brand name medications. Some generics are even manufactured by the same original brand on the same assembly line, and only the packaging is different.
4. Consumers can also avoid using multiple medicines when as an alternative, they can purchase one that takes care of all their symptoms. For example, why get one type of medicine for a runny nose, another type for a sore throat and a third type for a fever. If they ask their pharmacist, it very likely that they could get an ‘all-in-one’ medicine at half the price that will take care of all their symptoms.
5. Consumers that find themselves on regular medication, should check if their condition is listed as a chronic condition with their medical scheme. The same should be done if they receive a new diagnosis that requires ongoing medication. There are 27 chronic illnesses that all medical schemes must cover. While medical schemes don’t have to pay for the diagnosis of the condition (while the consumer is in a payment gap), as soon as you have a diagnosis, the medication could be covered by the consumers chronic medication benefits. Many people don’t realise that they need to submit their prescriptions to their medical schemes in order to claim from their chronic medication benefits and end up paying for these medications out of their own pockets. Some of the more well-known chronic conditions include asthma, diabetes, epilepsy, hypertension, rheumatoid arthritis and bipolar mood disorder. Some medical aids cover additional chronic conditions such as attention deficit disorder, depression, anxiety disorder, post-traumatic stress disorder and more, depending which medical scheme option the consumer belongs to.
6. Consumers should make use of their rewards programmes. There are a number of retailers that offer cash back, two-for-one or three-for-two specials on vitamins and other health products. Where possible, consumers should use these benefits to subsidise their monthly health expenses.

 

Plan better for the new year

Assuming consumers follow all the advice above and arrive in the new year with no backlogged medical needs, they are in a great position to plan and budget so that they don’t find themselves in this sticky situation again. While applying the same tactics and skills they have already learned, they should also sit down with their financial advisor and make sure that they understand exactly how their scheme works and how much their medical savings for the year is and where they need to fund any co-payments. Once they have a better understanding, they should draw up a medical savings budget which includes all the medicines and vitamins they may require for the year and that they purchase on a regular basis. Once they have a total spend amount, consumers should then assess if they have anything left over for those unforeseen medical expenses. If they find there is little, or no savings left or that they will run out of medical savings before the year is up, they should seriously consider which items they could pay cash for in order to minimise their financial risk should they fall ill unexpectedly. Remembering that anything they don’t spend from their medical savings will carry over to the next year, putting them into an even better situation than before.

Increasing petrol, electricity, water and food prices, and salary increases that barely cover the cost of inflation leaves the average South African consumer under tremendous financial pressure to make ends meet each month. This is evident from the March 2018 Credit Bureau Monitor which shows an alarming number of Credit Active South African consumers (50.4%) that are in arrears on their accounts.

 

Is the cost of medical aid contributing to the financial pressure of consumers?

There is a worldwide phenomenon, where the high cost of medication and new medical technology is pushing up the cost of medical expenses for the average consumer. In October last year, Fin24 reported that the average year-on-year increase of medical scheme contributions over the last 16 years has been 7.6%. According to Alexander Forbes Health, this is 1.9% higher than CPI inflation. It should come as no surprise then when StatsSA reveals that only 9.5 million people in SA are covered by a medical aid and that public clinics are still the first point of contact for most South Africans, with only 24.6% of the population using private doctors when ill.

 

Having medical cover offers consumers peace of mind, but the monthly contributions might be too much for consumers to bear!

It’s no secret that South Africans are struggling to maintain their medical aid repayments and may in many instances be considering ways to reduce this monthly expense. This is a risky decision which warrants doing research into the options available and how to reduce costs while getting the best cover available within budget constraints. Consumers that are considering cutting their medical aid from their monthly budgets to maintain other financial obligations, must carefully evaluate their options. Here are some ways to reduce medical scheme contribution costs without cancelling cover altogether:

1. Are there any other costs that can be cut?
   

   While this option may seem obvious, its often perceived by consumers that it’s easier to cancel a medical policy than to try to reduce other living expenses. Running a family budget is never easy as it requires buy-in and commitment from the whole family. Reducing unnecessary costs is preferable to losing your medical cover. As such, consumers should take a hard look at their situation and consider sacrificing some luxury items like private schooling, DSTV subscriptions, eating out and maybe even selling off a second car.

2. Investigate dropping your medical cover to a cheaper option (like a hospital plan)
   

   The number of benefits consumers opt for will determine how much they pay. Consumers should therefore investigate more affordable options with reduced benefits that their current scheme offers. The bigger the scheme, the more options available. However, consumers that are part of smaller schemes will have a more limited choice and may need to look outside their current scheme for better deals. One of the key challenges with trying to downgrade to cheaper cover is that most schemes only allow members to change to a different option once a year, usually towards the end of the year. Therefore, consumers will need to plan carefully and allow enough time to do their research, so that they can make an informed decision within this specified period. This is not a decision to be rushed.Some of the more common downgrade options that can be considered include; dropping down to a cheaper option with limited out-of-hospital cover and/or a smaller medical savings plan or no savings plan at all. There are also options available whereby consumers pay less if they use providers that are listed as part of the scheme’s doctor network. When deciding to downgrade your cover, be mindful of your own and your family’s current and possible future needs. Find an option that has suitable cover and that fits your budget.

3. Manage the dependents on your scheme
   

   If you have three children, there is no rule stating they all must be listed as dependents on your medical scheme. Most consumers don’t know this. While it may be risky, immediate savings could be made by removing healthy child dependents from your scheme and only keep those with greater medical needs covered. A better risk to take than to have no cover for the entire family. Should the main members financial situation improve, they could always add the other dependents back again. Just remember that there might be waiting periods imposed in this event.Another consideration is the cost of children that move from ‘child dependent’ status to ‘adult dependent’ status when they near the ages of 18-21 (depending on the scheme). As children change to adult dependents, their monthly contribution in some cases could double. Consumers in this situation should consider moving healthy adult children onto their own, more affordable hospital plan. Another option is to register your adult dependent as a student. As long as you have proof that your adult child is a full-time student with no income of their own, most schemes will allow for a discounted student rate. Also, some schemes only charge for three child dependents, so families with more than three children should definitely look at moving to one of these schemes.

All of these options are not as ideal as full comprehensive medical cover, and each comes with its own risks. However, the risks associated with these reduced cover options are still far better than the alternative of no cover at all.

Understanding how your medical benefits work is a daunting task for most consumers. For example, a scheme might cover a member for 100% of hospital costs at the medical fund rate. This doesn’t mean that all in-hospital costs will be covered, and uninformed consumers could still be left with an enormous bill for making use of a specialist that charges more than the medical fund rate.

Consumers wanting to explore how to get the most out of their medical aids in this tough economy should make use of the free instant online medical aid comparison tool available at medicalaid.co.za.

What are the basic principles of medical aid – how does it work?

South Africa has a dual healthcare system, consisting of public and private providers. Private hospitals are used mostly by members of medical schemes or those able to pay for these services out of their own pocket.

Medical aids are regulated by the Medical Schemes Act (1998). They are essentially non-profit organisations and belong to their members. Continue reading →

Benefits can become complicated. For your own good, here’s what you should know.

Medical schemes undertake liability in return for a premium or contribution. They are required to help their members in obtaining healthcare services and defraying expenditure for such services. The benefits that a scheme may grant must be registered in its rules. Continue reading →

Before choosing a medical scheme, and an option within that medical scheme, you need to consider the following points:

Needs and financial analysis

When deciding to join a medical scheme, first ask yourself what you can afford to spend on the monthly premium per month. Then look at your and your family’s needs. What is it that you need from your medical scheme? Continue reading →