What you should know when changing medical schemes

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Clients all get to the point where they review their healthcare plans and costs, and wonder if the benefits are better elsewhere. But before clients dive into making any changes to their essential medical aid cover, there are a number of important factors and implications that they 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 your clients these important questions:

Changing to a new medical scheme

Tip 1: Timing!

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

Why? Schemes tend to prorate benefits so they take into account the fact that clients weren’t a contributing member for the full 12 months of the year.

  • This means that the benefits of the new scheme are unlikely to be fully available for the first year.
  • On the other hand, the benefits offered by the scheme that clients are leaving won’t be available once they resign as a member – even though the client 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 the client can enjoy the full year’s membership of the new scheme.

Tip 2: Can they use their own doctor?

If the client’s current GP or specialist is not a member of the new scheme’s provider network, they 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 health care provider that hasn’t been designated.

Advice: Always check which hospitals and doctors the client allowed to use under the new scheme’s rules before they join.

  • If they use a provider that isn’t part of the scheme’s network, they may be forced to pay copayments and deductibles from their own pocket.
  • The scheme’s providers may be quite a distance from their home or work. Think carefully about whether this would suit the client.

Tip 3: Check the benefit limits

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

Why? Never assume that the benefits under the new scheme may be the same as the current medical aid.

  • Some schemes allow you to keep 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 a client has been to see a GP first and have a referral to the specialist. Others don’t.
  • Some allow the client to see a scheme-designated GP as often as they want, but pay for hardly any of the medicines. There’s a narrow list of medicines they will pay for and clients pay for those that aren’t on the list.
  • Some medical aids restrict the number of specialist visits in a year. Others restrict which specialists a client can 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 the client and their family experience or are likely to experience to the best of your knowledge.

Read more: NHI in focus at the BHF Conference 2017

Tip 4: Watch for nondisclosure of material information

If there are skeletons in the health closet that they are loathe to reveal to the new scheme, then the client should consider staying with their current scheme.

Why? When joining a new medical scheme, clients have to disclose all material information concerning the health status of them and their dependents. Membership can be suspended or cancelled if they fail to do so.

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

Tip 5: Taking medication for a chronic condition?

Clients may have to pay for chronic medication out of their own pocket for the next 12 months. Can they 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 the situation, and they 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 a new medical aid scheme.
      • This applies to anyone wanting a new membership or admission as a dependent.
      • Or, if the client or one of their dependents is diagnosed with a condition that requires ongoing treatment shortly after joining the new scheme, they may have to pay for it themselves 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 their responsibility to check this out before they make the change.

Advice: The client must apply to the scheme to have a chronic condition recognised 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 their current scheme pays for it then they 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 footing the bill, not just for a waiting period of 12 months, but for as long as they 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 three weeks per year or outpatient psychotherapy. It does not cover medicines.

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

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

Why? If they’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 three months. But if they have been a member of a medical scheme for a continuous period of less than 24 months, they might have to wait for up to 12 months before having 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

Clients may want to change to a different benefit option within the scheme for financial reasons or because they’re concerned about their changing health needs.

Advice: Although a scheme is not allowed to impose a waiting period if they change to another benefit option within that scheme, any waiting periods which applied when the client 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, healthcare providers and medications.
  • However, this can greatly benefit people who have very limited resources available to them for healthcare, or for people who don’t have chronic and existing conditions and are relatively healthy.
  • The point is to make sure that the option they have chosen to move to matches their 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), they could find themselves owing the scheme some money.

Why? If they’ve used up their entire medical savings account limit by the time they change benefit options in a particular year, they’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 the client to use the full amount of the benefit in the savings account before you have actually paid for it.

Advice: If they have a credit balance in their medical savings account and the option the client are transferring to doesn’t, then the money will be paid out to them. 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 they change from a higher to a lower benefit option, they could find that medicines and treatments that were paid for aren’t covered on 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 their health needs, changing to a lower option may not save the client any money in the long run because they’ll end up paying out of their own pocket for treatment and medicines that were paid for by their old benefit.

Advice: It is important to look at the benefits offered by the new option in the light of the client’s own health needs.

  • If they are relatively young and healthy and don’t need much medical attention in the course of a year then it might pay them to go onto a lower cost option.
  • However, if they 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 the client and their 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 to ‘apply’ for prescribed minimum benefits.

Tip 10: Are their favourites on the list?

When changing benefit options they may find that the client can’t use their favourite GP unless they pay the fees. They 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 the client aren’t on the list.

Why? Because the new benefit option doesn’t have their doctor on its list. Generally speaking, the lower cost benefit options impose greater restrictions on when and how to use healthcare providers and which providers a member may use.

  • The medication they are on for their high blood pressure or cholesterol or to control their 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 the client is taking and whether or not it’s on the new benefit option’s list.

  • If they change from a lower cost benefit option to a higher one, make sure they understand what the extra benefits are and how they match the client and their dependents’ health needs. There’s no point in changing to a higher benefit option if it doesn’t present a better fit for their 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 it will still be covered on a higher cost option.
  • If the client knows that they are likely to need hospital-based treatment in the coming year for a particular medical condition, it is highly advisable that they make sure that it is covered by the new benefit option before changing options.
  • And, if they 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 they will end up paying for it themselves.