It is that time of year when your medical scheme will require you to select your plan for next year. This is a good time to reflect on your medical needs to ensure that you are on the correct plan.

Andrew Edwards, principle officer at Liberty Health says many people are actually over insured. People tend to take out comprehensive cover in fear of what they will need rather than what is actually necessary. One needs to find a balance between spending money on cover you don’t really need  and ensuring that you are spending money where it matters most.  Analyse your medical expenses over the last year and compare that to your claims record to see if you are under or over insured. Here are seven questions you need to be asking:

Do you need day-to-day savings?

If you are a young single person who just needs to know that the big bills are covered when you have to go to hospital, then a basic hospital plan could be sufficient. However as your needs grow, especially when you have children, you may find you need a more comprehensive plan that includes a day to day savings portion to cover doctor visits and medication.

If you select a basic hospital plan the scheme still has to cover 54 prescribed minimum benefits which includes chronic conditions like HIV/AIDS, diabetes and hypertension for example. So if you suddenly require chronic medication, you will be covered. It is also useful to know that doctors tend to charge according to your plan so you have negotiating power if your plan does not fully cover the regular doctor fees.

According to Damian McHugh, Head of marketing and sales for Momentum Health, most medical savings for day-to-day expenses are fixed at a percentage of contribution by law. So that means that if a member needs more (or less) savings in a particular year, they will have to change their option in order to change the available day-to-day savings funds or end up paying for funds not used.

With Momentum’s HealthSaver product, members can make changes to their day-to-day cover without it requiring a complete option change too. Although the product sits outside the actual scheme thereby allowing the member to increase or decrease the savings portion, it is fully integrated with the medical scheme, ensuring seamless payment of claims to providers.

Do I have flexibility?

Considering that your needs change as you get holder, it is important to select a scheme that offers a range of options which will allow you to move between plans as your lifestyle needs change.  A scheme must be able to cater for your needs as a younger member when you just want hospital cover all the way through to your later years when need an option that provides extensive chronic cover. If you stay within the same scheme you can change options without any waiting periods or exclusions which could apply when you join a new scheme.

What is paid from risk and from savings?

A scheme pays claims out of two “pockets”. One is your day-to-day savings which is used for doctor visits, medication and out of hospital procedures. This has an annual limit and when the funds run out you have to pay your health providers yourself. The other pocket is from risk insurance. This is for major events such as hospitalization. The more the scheme pays from risk cover, the more savings you will have for other needs. An increasing amount of medical schemes are paying from risk cover for emergency room visits as a result of trauma, as well as preventative care such as inoculations and annual cholesterol and pap smear tests. This allows your savings to stretch further.

What chronic cover do I need?

All medical schemes are required to offer 54 prescribed minimum benefits which includes 27 chronic conditions. If you have a chronic condition then make sure you sign up for your medical scheme’s chronic plan so that your medications are paid from the risk portion and does not deplete your savings.

If you have a chronic condition that is not covered by the basic 27 chronic conditions, find out if your medical scheme has a plan that covers your condition. Many of the higher end products offer extended chronic cover, however you need to weigh your options carefully. If your chronic medication is relatively inexpensive it may not make sense to pay for a more expensive plan so then rather self-fund the medication.

Damian McHugh, Head of marketing and sales for Momentum Health says that if you do not require chronic medication then you can reduce your premiums by selecting to have your chronic medications issued by the state facility. As you do not actually need any medication you don’t require it to come from your local pharmacy and you can save on monthly premiums.

Am I covered for emergencies?

Good hospital cover is critical. Medical cover should be treated as insurance for unexpected events rather than a savings fund. Even if your fund offers exciting lifestyle options or added benefits, first check the cover for medical events that could wipe you out financially.  It is important to know if you have gaps in your emergency cover. Most medical schemes offer hospital cover of 200% to 300%  of the medical scheme rate. Most plans will pay the hospital in full due to arrangements they have with the hospital, however specialist fees may not be covered in full which could leave you out of pocket. Some schemes will pay specialists 300% of the medical scheme rate for emergencies but only 200% for elective surgery.

Is my doctor on the scheme’s network?

In order to provide more affordable healthcare, many schemes offer options which include a service provider network. For example plans such as Liberty Select, Discovery Delta, Fedhealth Maxima and various Momentum Health options require you to use doctors, specialists and hospitals on their network. By selecting one of these options you could reduce your premiums from 15% to 35%. But you need to know that while these plans pay in full for a health provider on the network, they usually will pay only a portion if the provider is outside of the network.  The member may have to pay upfront for a non-network provider but the medical scheme will settle directly with a network provider.

Heidi Kruger, Head of Communications at the Board of Healthcare Funders Southern Africa [BHF] says it is important to first find out if the scheme covers a doctor and hospital in your area. If the network is convenient to you this is a great way to reduce cost.

Some network plans will also pay the GP visit out of your risk cover if you have run out of savings as an added incentive to join the network.

Can I self-insure?

You can reduce your medical premium by opting for a co-payment on non-emergency or elective hospital procedures. This is similar to having an excess on your car insurance. Theoretically if you are going to have an operation the following year you could change to a plan that does not require a co-payment, but these options tend to be significantly more expensive so do your homework – it may be cheaper just to pay the co-payment than fund the difference in premiums for a year.

Comparing to last year’s plan

Your medical scheme would have informed you by now about your increases for 2013. Schemes have announced premium increases of between 7% to 9%, however, this is the average for the scheme as a whole and each plan is affected differently so it is important to check exactly how much more you will be paying and how your benefits have changed.:

• What is the monthly premium increase on my plan? Is it in line with the average increase?
• Has cover for my day to day expenses changed? The increase will cover the increased costs of those doctors’ visits but have any limits been applied that were not there before?  Has the scheme added benefits such as paying preventative care from risk benefits?
• Have there been any changes to the rate of cover for specialists or doctors? If you were covered by 300% of the schemes rate has that decreased to 200%?
• Have there been any changes to co-payments for operations or procedures? How much more will I be paying for elective surgery?
• Is the medicine I take still on the schemes formulary? Schemes have a list of medications they will cover in full, but these change each year and may require you to select an alternative medication or provide a co-payment
• Has my situation changed? Will I need to have chronic cover that I did not require before? Will I need an operation next year and will I be covered for that? If I am planning on staring a family what maternity benefits are included?

 This article first appeared in City Press