Thinking of cutting back on healthcare cover in tough times? Read this before gambling on your family’s healthcare requirements for 2017

The tough economic times facing the South African public are forcing many families to review their budgets as they look for ways to tighten their belts. When evaluating your family’s expenses, exactly where do you rank the importance of your family’s health?

“Consider an average family going through their finances and monthly expenses – a reality many of us are facing in order to make ends meet,” says Mark Arnold, Principal Officer of Resolution Health Medical Scheme.

“The rent or bond for the family home is often a non-negotiable expense. The household grocery bills might be reduced slightly by cutting back on luxury items and through choosing cheaper brands. When it comes to healthcare cover, ‘buying down’ is to be avoided because paying for quality medical scheme cover is the price of peace of mind.

“Perhaps during 2016 your family only had occasion to visit a GP once or twice, and this was covered by your medical scheme in terms of your chosen benefit option. Looking at your options for 2017, at first it may seem that your family could save money by opting for a cheaper benefit option. This simplistic view, however, does not take into account what you are really paying for as a member of a medical scheme,” Arnold points out.

To put this into perspective, last year’s World Health Organization and World Bank joint report Tracking Universal Health Coverage stated that in 37 countries, six percent of the population face being plunged into extreme poverty through having to pay healthcare expenses out of their pockets. According to the report, in the United States an estimated 60% of bankruptcies are attributed to spending on healthcare. This may be due to a sudden ‘catastrophic’ health event, or gradual outlay over a number of years.

“Medical scheme members are essentially contributing monthly to a pool of resources, not unlike a stokvel, which are made available to cover healthcare expenditure as it arises. From year to year, you may be fortunate enough not to require much in the way of healthcare services; you are safe in the knowledge that you will have access to healthcare cover if you have a medical problem requiring costly care. Essentially, within the medical schemes context private healthcare consumers get exactly what they pay for, and this is all-important when deciding just how important healthcare is to your family.

“Last year, your family may have only claimed a small amount, say for a few doctors’ appointments. In this case, your family had the good fortune not to be troubled with serious medical problems. However, none of us can predict what the next year may hold for us,” Arnold warns.

“This year your family only had occasion to dip a toe into the greater pool of medical scheme funds but your membership means that, if the need arose, you would have had access to more of these pooled resources.

“Using the analogy of a swimming pool, different levels of medical scheme benefit options can be likened to access to different sections of a swimming pool.

“Resolution Health’s Foundation plan, which covers prescribed minimum benefits (PMBs), offers you access to the top steps of the swimming pool. Our Hospital Plan offers slightly ‘deeper’ cover, providing for PMBs, hospitalisation and chronic conditions on the Chronic Diseases List but no day-to-day cover. These options are designed for younger, healthier individuals and very low income earners who are entering the realm of private healthcare consumers,” Arnold explains.

PMBs are a list of 270 conditions that medical schemes are legally required to cover. Resolution Health members on the Foundation and Hospital Options are also granted membership of Zurreal wellbeing and rewards programme. Members on the Hospital Option are also covered with international travel health insurance.

“Intermediate benefit options, such as Resolution Health’s Progressive Flex and Millennium options, cost a little more, and would allow you to swim in the shallow end of the pool in the analogy. This would mean your family have more benefits, such as flexible day-to-day benefits and some cover for extra chronic conditions.

“In addition, members on the Millennium option, which has a new generation structure, start building their own pools in the form of a Medical Savings Account, which only the member and their dependants have access to, and which they can use as they choose on any area of their healthcare.

“Comprehensive healthcare cover does cost more, however the access such options provide in terms of the range of conditions covered and the types of treatment, as well as choice of healthcare provider, is superior in every way. In addition, the Supreme option offered by Resolution Health includes additional benefits such as access to superior chronic care, and the freedom to choose your healthcare provider.

“To return to the swimming pool analogy, our Supreme option not only allows members extensive access to the deep end of the pool, but the diving board and the pool lounger chairs too.

“When reviewing your family’s healthcare cover for the year ahead, carefully consider the implications if you or a loved one were to be faced with an unexpected health calamity. Such a calamity, analogous to a raging fire, would not be as much of a threat to medical scheme members who have access to the swimming pool.”

Arnold advises the public that it is usually not possible, with open medical schemes in particular, to expect immediate cover if you have allowed your previous membership to lapse. “If this were the case, no one would belong to medical schemes until they required expensive medical treatment. The pool’s water level would quickly deplete if people were constantly dive-bombing into the pool and jumping out again just as quickly.

“This is why it is important to think carefully before buying-down or opting out of medical scheme membership. It is far more affordable for most people to set aside an amount each month and be assured of quality medical cover when the need presents itself, than to suddenly find themselves having to pay healthcare bills – which can quickly escalate into hundreds of thousands of rand – out of their own pocket,” Arnold concludes.