Deciding on a medical aid

Medical aid is quickly becoming a necessity, rather than a luxury, so it’s important that you pick the right option. Before choosing your plan, it is important to understand certain aspects of medical aid.

Prescribed Minimum Benefits (PMBs) is a set of defined benefits to ensure that all medical scheme members have access to certain minimum health services, regardless of the benefit option they have selected. The aim is to provide people with continuous care to improve their health and well-being and to make healthcare more affordable. It is important to note that they may limit you to network options for you to be covered under a PMB condition.

If you have chosen a plan with a medical savings account (MSA), your medical aid will refund the account with a certain amount of funds at the beginning of the year. As you visit the doctor and get day to day medication, the value of this account decreases. At some point you may be requested by some medical service providers to cover some of your own medical expenses as your medical savings account (MSA) has been depleted.

On certain medical aids you will have a self-payment gap. When you have depleted your MSA, you will have to pay for a certain amount of your own medical expenses until you have reached the self-payment gap limit. Once you have reached this amount, the medical aid will pay the expenses such as doctors’ visits and day to day medication again.

In order to protect medical schemes from people who abuse the fund, medical schemes can impose penalties if you haven’t been part of a medical aid for a certain period of time. These penalties can range between 25% - 100% and will be levied on your monthly contributions.

You should always consult with a CFP® professional to guide you in selecting the ideal plan for you. When doing your own research initially, consider the following.

  • Decide what you can afford.
  • Decide if you want to be limited to certain hospitals and doctors only, bearing in mind that most funds have a lower contribution when you use network doctors.
  • What chronic conditions the proposed plans cover. Certain chronic conditions are covered totally from the medical aid and might assist with your MSA lasting longer.
  • Consider the percentage cover you will have. Certain schemes and options will cover up to 200% of the medical aid tariff and some schemes will only cover 100% of the scheme tariff. This is especially important when you need to consult with specialists.
  • Certain schemes have co-payments for certain procedures and medicines; make sure that you understand what is expected from you.
  • Always remember that you can only change your medical aid plan at the beginning of the year. Certain medical aids will allow you to downgrade during the year, but a very limited number of schemes will allow you to upgrade during the year.

When you switch medical aids, you need to understand that your new medical aid might impose a waiting period on your membership. Waiting periods are dependent on your historical cover, the break in cover you might have had and the conditions you have been diagnosed with.

You may be required to pay the medical aid you are leaving any pro-rated amount that you may have exhausted in your MSA if you leave the provider before the year is over.

Always consult a CFP® professional when you decide on or plan to move medical aids.