Making changes to your medical aid
Wherever possible, consumers are tightening their belts and looking at ways to consolidate expenses and save money. Healthcare is no exception.
Traditionally, members of medical aids re-evaluated their medical cover annually, to coincide with increase announcements as well as changes to plans and benefits which come into effect on January 1 each year.
However due to the pandemic, a number of medical aid schemes have deferred or postponed their increase announcements.
This new pricing is being introduced at different times during the year and at varying percentages – often above inflation.
‘This has caused some confusion and challenges,’ says Lee Callakoppen, Principal Officer of Bonitas Medical Fund – which opted not to defer increases.
“Members are free to change their options, once a year, during the open period.”
“However, with deferred increases, this often falls out of the open period. This means members start paying the increased premium after to change options has closed.’
Callakoppen explains that the medical aid industry is highly regulated with specific rules and regulations that could impact changing plans and moving schemes.
These include waiting periods, late joiner fees and accumulated savings – that all need to be considered when changing plans
Let’s take a look at some of the important membership rules and regulations.
Can you change your membership any time during the year?
You can change at any time but usually this happens during open period with new contracts coming into place from the beginning of a new year.
Waiting periods are not usually imposed unless for pre-existing conditions. However, the savings allocated to a plan may be affected.
Savings are allocated in advance for 12 months so, if you leave during the year and have used more than the appropriate portion of savings, you will have to pay this back.
What if you change from one scheme to another?
Your specific details and medical history will be taken into account, for example pre-existing medical conditions, how long you have belonged to a medical aid, etc. and underwriting may apply.
What is a waiting period?
According to the Medical Schemes Act, medical aid schemes are entitled to impose a three-month general waiting period.
This protects other members of the Scheme by ensuring that individuals aren’t able to make large claims shortly after joining and then cancelling their membership.
There are two types of waiting periods: General waiting period (up to three months) and a condition-specific waiting period (up to 12 months).
When do waiting periods apply?
Waiting periods generally apply if you move from one medical aid to another, you or your dependants were not on a medical aid for a period of at least 90 days before you joined, or you have never been a member of a medical aid.
Can these be waivered?
Waiting periods can be waivered but this depends on the medical scheme.
Do you pay premiums during a waiting period?
Yes, you continue to pay your full premium during the waiting period.
If a member upgrades are there ‘waiting periods’?
Members usually upgrade because of a change in healthcare or personal circumstances.
In cases where a member has a hospital plan only, they may upgrade due to changes in age or a need for day-to-day cover.
What is a late-joiner penalty?
Schemes can impose late-joiner penalties on individuals who join after the age of 35, who have never been medical aid members or those who have not belonged to a medical aid for a specified period of time since April 2001.
The reasoning is to ensure fairness (whereby members who have been part of a scheme for years are not subsidising newer members.
Upgrading from hospital insurance
If someone has been on hospital insurance but decides to move to a medical aid and is over the age of 35, a late-joiner penalty will still apply.
Can you move directly from hospital insurance to medical aid?
Even though hospital plans are governed by the Medical Schemes Act and, not as previously by the Financial Services Board, late-joiner penalties will apply if you move from a hospital insurance to any form of medical aid (including a hospital plan).
Does the late-joiner penal reduce over time?
No, unfortunately not. Once you are paying a late-joiner penalty, it remains in place.
What are some of the obstacles that can be encountered when switching Medical Aid companies?
Switching mid-year results in pro-rated day-to-day benefits but if you are switching to a medical scheme or plan that offers additional value it is a good move in the long run.
However, members must take care to ensure they have not used more than a prorated percentage of the benefits on their previous plan or they could be asked to pay it back.
This is usually the case in plans that have a savings component, where savings are available upfront.
This will happen if a member depletes the savings’ portion before the end of the year and switches to another medical aid.
“The bottom line is that members need to do due diligence if they are considering switching medical plans or schemes.”
“They need to evaluate the monthly contribution against the benefits being offered and make sure they will cover their healthcare needs,” says Callakoppen.
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