Choosing a leading financial scheme

Discovery and Momentum medical schemes topped the tables in this year’s GTC Medical Aid Survey across most plans.

The extensive survey, conducted by financial advisory business GTC, takes various criteria into account when ranking the scheme options.

Jill Larkan, head of healthcare consulting at GTC, says that, when selecting a medical scheme for clients, they always consider the sustainability of the fund in the long term.

“On the micro level, we compare the premiums in the relevant categories and then we look at 10 major macro criteria,” says Larkan, who explains that the macro criteria provide a good idea about the sustainability of the fund, and whether or not the fund will be able to contain premium increases in the future.

The GTC survey looks at the number of members on the scheme; growth in membership year on year, and over a three-year period (indicating trends developing); year-on-year growth within the pool of members over a one- and three-year pool (indicating whether one scheme was able to attract members from another); solvency ratio; net healthcare results over a one- and three-year period; the average age of the members; and the number of complaints received on the Hello Peter website.

A fund is more likely to be sustainable if it has a solvency ratio of at least 25%, a relatively low average beneficiary age (37 or younger) and a broad membership base.

Just looking at the cheapest fund does not take into consideration the sustainability of the fund.

If a fund is experiencing higher claims than premiums, it will eventually incur higher premium increases or collapse.

The survey compared options across different levels:

ENTRY LEVEL

The top three rated schemes for entry-level plans (within the state only, and for low and mid salary-banded categories) include:

. Makoti Primary (state only for hospital);

. Momentum Ingwe (state only for hospital); and

. Discovery KeyCare Access (state only for hospital – excluding maternity).

These plans provide in-hospital and out-of-hospital benefits, but within a limited list of doctor and hospital networks, and for limited medications. These are aimed at young first-time workers, and many allow members access to private hospitals as well as GPs, dentists and opticians, for example.

Most plans charge based on the salary earned, so although the benefits remain the same for all members, the higher-income earners are cross-subsidising lower earners.

HOSPITAL-ONLY PLAN

The top three rated schemes include:

. Discovery plans: Essential Smart, Essential Delta Core and Costal Care;

. Genesis Private Choice; and

. Momentum Custom.

These provide for in-hospital cover only, but include out-of-hospital cover of chronic illness and prescribed minimum benefits as set out by the Medical Schemes Act.

SAVER PLANS

The top three rated schemes include:

. Discovery Essential Delta Saver, Classic Delta Saver, Coastal Saver;

. Momentum Incentive; and

. Topmed Active Saver.

A saver plan provides in-hospital benefits at various levels and also provides access to out-of-hospital benefits via an out-of-hospital benefit or savings account.

COMPREHENSIVE PLANS

The top three rated schemes include:

. Momentum Extender;

. Discovery Essential Delta Comprehensive, Classic Delta Comprehensive, Essential Comprehensive, Classic Comprehensive, Classic Comprehensive R0 MSA; and

. Topmed Executive.

These plans have unlimited above-threshold benefits or unlimited secondary out-of-hospital benefits.

HOW TO SELECT THE CORRECT PLAN

When selecting the correct scheme or option for your needs, you need to consider the benefits offered and whether they suit your needs.

What is the level of hospital cover?

More than three-quarters (76%) of plans offer only 100% medical scheme rate cover for in-hospital costs. Only 28 plans offer 200%, and only seven offer 300%.

“It is important to include a gap cover insurance as part of your medical cover because most private hospitals charge above the medical scheme rate,” says Larkan.

What are the annual limits?

Five medical schemes still impose overall annual limits on risk cover, which aims to manage the scheme’s risk exposure.

If there are limits on your plan, you need to understand what those are and how they affect you.

The schemes include Commed, Topmed, Momentum, Compcare and Hosmed.

Until what age is my child covered?

Most schemes cover children up to the age of 21, however, some schemes allow a child to remain a dependant until the age of 28.

More than half of the schemes only charge for either the first two, three or four children.

For example, if your plan only charges for the first three children and you have four children, your fourth child is covered for free.

What chronic benefits do you offer?

More than 60% of medical plans offer additional chronic illness benefits over and above the prescribed minimum benefits. These tend to be higher-end plans, with some comprehensive plans such Makoti Comprehensive and Profmed’s ProPinnacle offering unlimited chronic illness cover.

What maternity benefits do you provide?

Most schemes provide for maternity benefits from the risk portion and not from savings accounts.

Larkan says this encourages younger members to retain their cover and to ensure they are on the right plan as maternity benefits have no affect on their savings account.

Check what additional benefits are provided as these vary by plan.

For example, nearly 60% of plans offer specialist consultations, only 20% offer antenatal classes and 60% offer scans.

What is your cancer cover?

Nearly three-quarters of plans offer oncology treatment levels above the prescribed minimum level, with seven plans offering unlimited cover – these include Fedhealth Maxima Plus and Ultimax, Momentum Summit and Medihelp Plus.

If your scheme does not have extensive cancer cover, you can top up through gap cover insurance.

What else do you cover from risk and not saving?

The more bills paid from risk and not savings means that your day-to-day savings last longer.

About 30% of schemes pay for contraception from risk, and nearly 50% of schemes cover specialised radiology such as MRI and CT scans from risk.

Many schemes also cover emergency hospital visits or trauma events from risk.

Most schemes now cover preventive doctor visits or medication from risk cover, including flu vaccinations, pap smears, cholesterol tests and mammograms.

This encourages members to take their annual tests as it does not affect their day-to-day medical savings.