Question

I received an email from my medical aid instructing me to choose the benefit option I want for the new year.  I have no idea what I should look out for.  Do I just choose the most expensive one just to be safe?

Answer

Going for the most expensive option could result in you wasting money on benefits that you do not need.  I will run through the key benefits that you should look at when choosing an option.

Medical aids can seem complex, but they are essentially made up of a number of building blocks. 

Hospital benefit

This covers your treatment inside a hospital. Here is challenge number one – what category of hospital do you choose?

Each medical aid has different categories of hospital ranging from government hospitals to luxury private hospitals and each scheme has got its own definition of these hospitals. 

What you need to do is identify the hospital that you would like to go and then choose the cheapest scheme type that has that hospital on its panel.

Day to day benefits

The next benefit you need to look at is the day to day benefit.  These cover medicines and visits to medical professionals.  Most schemes have some sort of savings account that you pay into each month.  When this account gets exhausted you will have to pay for the benefits yourself. 

You need to make a call as to which type of scheme suits your cashflow.

Leisure activities

If you are a keen mountain biker, then the chances of you needing a decent x-ray and MRI benefit would probably be high. There are schemes which include this as a matter of course and schemes which have high copayments.

If your lifestyle is such that you are more likely to use this kind of benefit it would make sense for you to choose a benefit structure that covers this.

Loyalty programmes

Several medical aids have loyalty programs linked to activity levels. It costs money to join these loyalty programs so you need to do at the calculation and see whether your activity level will be such that you will qualify for the discounts otherwise these loyalty programs are not worth using.

Gap cover

Medical aids pay their benefits according to a list of tariffs.  In many instances, hospitals and doctors charge more than the recommended rate.  You can, therefore, find yourself out of pocket.  This is where you need to get gap cover.

Gap cover pays the difference between what the supplier charges and what the medical aid pays.  There are many different types of gap cover, and your medical aid broker would be able to identify the right one that compliments the medical scheme that you are on.

Gap cover is relatively cheap, and you may be able to save on your medical aid premiums by choosing a cheaper medical aid and getting the gap cover to make up the difference

Your personal health

You are usually allowed to upgrade your membership once a year. This is typically at the end of the calendar year.  You may, however, downgrade your membership at any stage during the year.  If things are not going well on the health front, you should consider upgrading your membership.  If it improves during the year, you can always downgrade.

Choosing a medical aid is not an easy task.   You will need to make tradeoffs to find the sweet spot where the benefits and price work for you. I would recommend that you chat to someone who is familiar with the products offered by all the companies and is not aligned to any particular company.   They can help you find the combination of benefits that suits your needs and pocket.