What to look out for when changing medical schemes and benefit options

Source: Insurance Chat

We all get to the point where we review our health care plans and costs and wonder whether the grass is greener on another side, or whether we could be getting more bang for our buck. But before you dive into making any changes to your essential medical aid cover, there are a number of important factors and implications that you need to thoroughly evaluate beforehand. The Board of Healthcare Funders of Southern Africa (BHF) has a big picture, independent knowledge of all the medical aid schemes on the market and recommends that you ask yourself these important questions:

Changing to a new medical scheme

Tip 1: Timing!

If you’re going to change schemes in the middle of the year – you may only get half the benefits!

Why? Schemes tend to pro-rate benefits so they take into account the fact that you weren’t a contributing member for the full twelve months of the year.
◾This means that the benefits of the new scheme are unlikely to be fully available to you for the first year.

◾On the other hand, the benefits offered by the scheme you are leaving won’t be available to you once you resign as a member – even though you would have paid a significant amount in contributions. (And you cannot be a member of two medical schemes at the same time).

Advice: Change medical schemes at the end of the year or the beginning of a new year so that you enjoy the full year’s membership of the new scheme.

Tip 2: Can I use my own doctor?

If your current GP or specialist is not a member of the new scheme’s provider network, you may have to change doctors. For some people, this is not a problem, but for others with a more complex and detailed medical history known only to their doctor – it may be a big issue.

Why? Many schemes have preferred provider networks.
◾This means that they contract with certain hospitals and doctors.
◾Even if the treatment is for a prescribed minimum benefit condition, the scheme may not pay all of the costs if you voluntarily use a healthcare provider that hasn’t been designated.

Advice: Always check which hospitals and doctors you’re allowed to use under the new scheme’s rules before you join.
◾If you use a provider that isn’t part of the scheme’s network, you may be forced to pay co-payments and deductibles from your own pocket.
◾The scheme’s providers may be quite a distance from your home or work. Think carefully about whether this would suit you.

Tip 3: Check the benefit limits

If you change schemes, you might suddenly find yourself having to pay adult rates for your child who is studying at university. Or, if the specialist you’ve been seeing for the last 10 years is not on the new scheme’s list and you want to continue seeing them, you may have to pay for this yourself, especially if they charge more than your benefit option tariff.

Why? Never assume that the benefits under the new scheme may be the same as your current medical aid.
◾Some schemes allow you to keep your student children registered as dependents up to the age of 25 while others cut-off at 21or 23.
◾Optical benefits on some medical aids allow for a new pair of prescription reading glasses every year, while others only provide this benefit every second year.
◾Some schemes will only pay for a medical specialist after you’ve been to see a GP first and have a referral to the specialist. Others don’t.
◾Some allow you to see a scheme designated GP as often as you want but they pay for hardly any of the medicines. There’s a narrow list of medicines they will pay for and you pay for those that aren’t on the list.
◾Some medical aids restrict the number of specialist visits you have in a year. Others restrict which specialists you use by means of a list of designated providers or participating providers.

Advice: Make sure that the benefits of the new scheme are a good match for the health conditions you and your family experience or are likely to experience to the best of your knowledge.

Tip 4: Watch for nondisclosure of material information

If there are skeletons in your health closet that you are loathed to reveal to the new scheme, then you should consider staying with your current scheme.

Why? When joining a new medical scheme you have to disclose all material information concerning the health status of you and your dependents. Your membership can be suspended or canceled if you fail to do so.

Advice: The law stipulates that you cannot be a member of more than one medical scheme.

Tip 5: Taking medication for a chronic condition?

You may find yourself having to pay for your chronic medication out of your own pocket for the next 12 months. Can you afford this?

Why? Medical schemes can impose waiting periods in certain circumstances. Waiting periods are designed to prevent problems caused by anti-selection, whereby people only take out cover selectively when they need it.

◾Chronic conditions require ongoing medication and they may not necessarily be covered under the prescribed minimum benefit conditions. If this is your situation, and you have been a beneficiary of an existing medical scheme for less than two continuous years, the condition specific waiting period can be up to a year on your new medical aid scheme.
◾This applies to anyone wanting a new membership or admission as a dependent.
◾Or, if you or one of your dependents is diagnosed with a condition that requires ongoing treatment shortly after joining the new scheme, you may have to pay for it yourself for a period of three months or so.
◾If the condition falls within the scope of the prescribed minimum benefits then the scheme is not allowed to impose a waiting period, but it is your responsibility to check this out before you make the change.
◾Remember, we don’t get to pick our illnesses or choose when we get them!

Advice: You or your provider must apply to the scheme to have a chronic condition recognized as a prescribed minimum benefit condition. Be aware that:

◾This doesn’t necessarily happen automatically.
◾Depression and anxiety medication is usually a big one to consider in these scenarios. If your current scheme pays for it then you are probably on quite an expensive benefit option.
◾There are many schemes that do not pay for such medication and changing to another scheme may mean that you have to foot the bill yourself, not just for a waiting period of 12 months, but for as long as you are a member of the new scheme.
◾Although the treatment of major depression is a prescribed minimum benefit, the benefit is hospital-based management for up to 3 weeks per year or outpatient psychotherapy. It does not cover medicines.

Tip 6: Having surgery or major medical treatment within the next 3 months?

If your surgery or other treatment is not covered by the prescribed minimum benefits and you change schemes, you might not be able to have it for up to a year after joining the new scheme unless you pay for it yourself!

Why? If you’ve been a member of a medical scheme for more than 24 months, a new medical scheme may impose a general waiting period of up to 3 months. But if you have been a member of a medical scheme for a continuous period of fewer than 24 months, you might have to wait for up to 12 months before you can have your surgery.

Advice: The only exception is if the treatment or diagnostic procedure is covered by the prescribed minimum benefits. So make sure to check this first.

Changing benefit options within the same medical scheme

Tip 7: Changing benefit options

You may not want to change your medical scheme, but you’d like to change to a different benefit option within the scheme for financial reasons or because you’re concerned about your changing health needs.

Advice: Although a scheme is not allowed to impose a waiting period if you change to another benefit option within that scheme, any waiting periods which applied when you first joined the scheme will still apply.

◾As a general rule, the lower the cost of the option the fewer the choices available to the member regarding medical treatment, health care providers, and medications.
◾However, this can greatly benefit people who have very limited resources available to them for health care, or for people who don’t have chronic and existing conditions and are relatively healthy.
◾The point is to make sure that the option you have chosen to move to matches your health care needs as closely as possible.

Tip 8: Changing from a medical savings account to a benefit option without one

If you change from one benefit option to another halfway through the year and the first benefit option has a medical savings account (but the new one doesn’t), you could find yourself owing the scheme some money.

Why? If you’ve used up your entire medical savings account limit by the time you change benefit options in a particular year, you’ll have to pay the scheme the rest of the monthly contributions (for the medical savings account part of the old option).
◾This is because contributions to a medical savings account are deducted monthly – but the scheme allows you to use the full amount of the benefit in the savings account before you have actually paid for it.

Advice: If you have a credit balance in your medical savings account and the option you are transferring to doesn’t, then the money will be paid out to you. If the new benefit option has a medical savings account, then the money will be transferred into it.

Tip 9: Moving from higher to lower? Check the benefit limits

If you change from a higher to a lower benefit option you could find that medicines and treatments that were paid for aren’t covered by the lower option. A good example of this is antidepressants and anxiety medications. Only the higher cost options tend to pay for these medications.

Why? Lower options cost less because they cover less.

  • Depending on your health needs, changing to a lower option may not save you any money in the long run because you’ll end up paying out of your own pocket for treatment and medicines that were paid for by your old benefit.

Advice: It is important to look at the benefits offered by the new option in the light of your own health needs.
◾If you are relatively young and healthy and don’t need much medical attention in the course of a year then it might pay you to go to a lower cost option.
◾However, if you are getting older or have a family history of a particular medical condition or a chronic condition that is not a prescribed minimum benefit condition, then changing to a lower cost benefit option may not be wise.
◾Remember that all options have to cover the prescribed minimum benefit conditions – but you and your doctor first have to convince the scheme that your condition falls within the prescribed minimum benefits before it will pay for it.
◾Some schemes have forms that have to be completed in order to “apply” for prescribed minimum benefits.

Tip 10: Are your favorites on the list?

When changing benefit options you may find that you can’t use your favorite GP unless you pay the fees yourself! You may also have to travel to a hospital on the other side of town to have an operation or to see a medical specialist because those closest to you aren’t on the list.

Why? Because the new benefit option doesn’t have your doctor on its list. Generally speaking, the lower cost benefit options impose greater restrictions on when and how to use healthcare providers and which provides a member may use.
◾The medication you are on for your high blood pressure or cholesterol or to control your blood sugar may have to be changed to others that appear on the benefit option’s formulary if the scheme is to pay for them in full.

Advice: It’s important to be aware of what medication you’re taking and whether or not it’s on the new benefit option’s list.

◾If you change from a lower cost benefit option to a higher one, make sure you understand what the extra benefits are and how they match you and your dependents’ health needs. There’s no point in changing to a higher benefit option if it doesn’t present a better fit for your health needs.
◾Most in-hospital costs are covered by all benefit options because hospital treatment falls largely into the prescribed minimum benefits. (Of course, this does not apply to elective in-hospital procedures)
◾All benefit options have to cover the prescribed minimum benefits. However, there may be certain hospital treatment that does not fall into this category but and it will still be covered by a higher cost option.
◾If you know that you are likely to need hospital-based treatment in the coming year for a particular medical condition, it is highly advisable that you make sure that it is covered by the new benefit option before changing options.
◾And, if you suffer from a chronic medical condition that doesn’t fall into the prescribed minimum benefits, make sure that the new benefit option covers it. Otherwise, you will end up paying for it yourself.

The Board of Healthcare Funders of Southern Africa is a body representing the health care funding industry including medical schemes, administrator organizations and managed care organizations. For more information go to www.bhfglobal.com