Be wary when choosing a medical aid scheme

By Staff Writer
Problems with Bonitas, the medical scheme the government regulator Council for Medical Schemes wants placed under curatorship, beg the question - how do you pick a good healthcare provider?

Tips from the council and industry body, the Board of Healthcare Funders, can be found in the TroubleShooter column on page 10. But they highlight the problem: Bonitas looked very good on paper.

The council's annual report, which can be downloaded from www.medicalschemes.com, tabulates the income statements and balance sheets of all registered medical schemes.

A key figure is the "solvency ratio" found in the balance sheet. The regulator stipulates this must be higher than 25%. But Discovery, this country's biggest medical scheme measured by members and contributions, only passed this test recently.

As the accompanying table ranking open medical schemes by their contributions shows, many of this country's largest healthcare providers fail the solvency requirement. The council allows them to operate provided they can satisfy the regulator that they will achieve this minimum solvency ratio.

Back to Bonitas: its solvency ratio was a healthy 47.3% at the end of 2008 (the most recent figures in the council's annual report). "Size matters" is common advice in the healthcare industry. The council has over the past few years encouraged smaller, weaker medical schemes to amalgamate with bigger players, causing the list of registered schemes to gradually shrink.

But again Bonitas looks good. Discovery towers above the other players, collecting R21-billion contributions in 2008.

The council splits medical schemes into two types: "open" if they solicit business from the public and "restricted" if they are in-house, employee-only schemes. Including both types, the restricted Government Employees Medical Scheme is the second-largest, gathering R5.9-billion in contributions in 2008. Bonitas is third with R5.1-billion, placing it second if only open schemes are compared.

For younger people who want to avoid subsidising the higher healthcare costs of pensioners when they join a medical aid, the council's annual report includes the average age of each scheme's members, and the percentage of beneficiaries older than 65.

Here again Bonitas looks good, with an average age of 29.5 years and only 3.7% of beneficiaries past retirement age. So going by its figures alone, Bonitas looks like a very good scheme.

The council stated in its High Court application that it considered the scheme financially strong, but material irregularities existed in its governance.

Consumers shopping for medical aid are faced with an alphabet soup of acronyms. One causing much unhappiness is DSPs, which expands into designated service providers. Instead of going to a family doctor and corner chemist, the medical aid dictates that you have to go to specific hospital and pharmacy chains.

Limiting consumer choice sounds like an invitation for corruption, and the council's annual report indicates this problem has raised its head. It reads: "Our investigation into alleged irregularities in the contract between Bonitas and Pharmacy Direct continued."

Other acronyms thrown at you are PMB - government's prescribed minimum benefits that medical schemes are supposed to pay from their "risk" pool - and PMSA, which stands for personal medical savings account, a portion of your medical aid contributions the schemes are not supposed to pay for PMBs with.

Using the marketing bumf of the schemes to decipher all of this is no help The council said: "We found discrepancies and inconsistencies between the marketing materials and the registered rules of these schemes; we raised our concerns with them. We continue to monitor such material to ensure schemes fully comply with the act." My only suggestion is that, before signing up for a medical scheme, you should phone its helpline to see if it gets answered within a reasonable amount of time.

This article was originally published on www.timeslive.co.za

  • In order to ensure you are properly covered, shop around and compare quotes first - write down a list of what you will need your medical aid for and, when you get a quote - ask whether these things are 100% covered. It is important that you know the exact terms and conditions of your medical aid scheme so that you are not taken my surprise when a hospital bill arrives and your medical aid refuses to pay. 

 

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