Changing medical aid options

As medical costs continue to rise, the last thing you want is to find out that you are on the wrong medical scheme plan.

But, depending on the rules of your scheme, you may not be able to change medical scheme options partway through the year, says Damian McHugh, executive head of sales and marketing at Momentum Health.

When considering a change of medical aid cover, it might mean moving between schemes — from Momentum to Discovery, for example — or staying with the same medical scheme and changing your plan or option — such as moving from Discovery’s Coastal Core plan to the Classic Saver plan.

The main reason for limiting when members can change options is to prevent the practice whereby “everyone stays on the cheapest option and when they get sick, they jump onto the highest plan. That’s like only buying insurance after you crash your car,” says McHugh. “So most medical schemes are likely to say no if you want to move from one plan to another within a year. In October or November, you can choose your scheme and plan for the following year, and then you can’t change until the following year,” he says.

Jill Larkan, the head of health-care consulting at financial services company GTC, says you may realise you are on the wrong plan when:

• You reach the middle of the year and find you have a huge balance in your savings and you are paying a large medical aid premium every month. In this case, you are probably on an expensive plan even though you don’t have many health-care needs;

• Your finances are taking strain and you need to find cheaper cover. This is probably relevant for many medical aid members right now;

• You are facing a future medical or hospital event and realise you are on a plan with few benefits (for example, a hospital plan) when you actually need one with much higher benefits (for example, a comprehensive plan); or

• You have a chronic condition or a severe illness, such as cancer, and your current benefits don’t match up to your treatment requirements.

TOWARDS YEAR-END YOU CAN CHANGE OR KEEP YOUR PLAN FOR THE FOLLOWING YEAR

Larkan notes that some medical schemes are more flexible. For example, Fedhealth will allow you to change your plan within the scheme within 30 days of a life-changing event, such as marriage of the main member, pregnancy or the diagnosis of a dread disease, like cancer, diabetes or HIV/Aids.

“Discovery Health will allow you to downgrade if it is due to a reason such as death or divorce, where the premium or benefit level is simply no longer required. Discovery may also allow you to downgrade to a lesser plan if, for example, you decide you can use a lower-cost plan and you want to redirect the money you save on contributions towards a Discovery retirement annuity,” she says.

However, she notes that there are set parameters for such downgrades. For example, if you are currently on a network plan that means you are restricted to a specific network of doctors and/or hospitals, you cannot “change to a plan that allows freedom of choice in hospital selection.

“You will be required to stick within the original choice of plan network limitations,” Larkan says

Considerations when deciding to switch

Changing to a medical scheme other than that recommended by your employer may mean your employer is unlikely to continue to pay your medical scheme subsidy, which will increase your contributions greatly.

If you switch partway through the year, your benefits may be calculated from the date of joining the new option or scheme. For example, says Bianca Viljoen, spokesperson for Health Squared Medical Scheme, the new plan may have a R500,000 limit for cancer, but if you switch at the end of June, you will only be able to access 50% or R250,000.

“You would have proportionately lower benefit limits for the remainder of the year,” she says.

If you have pre-existing conditions such as asthma or cardiac issues, the new medical scheme is allowed by law to provide three underwriting conditions:

1. A three-month general waiting period where no claims are covered except the prescribed minimum benefits (PMBs) and chronic medicines. Note that your chronic medicines might be covered but the new medical scheme might pay for a different product.

2. A 12-month, condition-specific waiting period if you have pre-existing conditions such as cholesterol, for example. The new scheme may not cover any costs related to that condition for a year. This waiting period can only be applied if you have not been a member of a scheme for 24 months or if you don’t join a new scheme within three months.

3. A late joiner penalty — this only applies if you did not previously belong to a medical scheme and are 35 or older. The late joiner penalty is percentage-based on a sliding scale, depending on how old you are and for how long you had no medical aid after 35.

Damian McHugh, executive head of sales and marketing at Momentum Health, says you can switch from one medical scheme to another halfway through the year if you are self-employed or your company gives you a choice of schemes. He says applying to a new medical scheme costs you nothing.

“My recommendation would be to fill out the form and see what the new medical scheme comes back with. If they impose restrictions, you are under no obligation to move just because you applied to a scheme. “Don’t cancel your existing medical scheme cover until you have made a final decision,” he says.