Which medical aid scheme is the best in SA? And which one is the worst?
Well…. it depends on who is asking the question, as well as who is answering it.
Are you asking a parent whose child received life-saving treatment in a private hospital; all costs paid in full? Or are you putting the question to a broker who may be purely commission-driven, or to a research company or to a media house that is paid to report inclusively or exclusively on certain schemes? In short, different folks have different agendas depending on their profit needs.
All medical aid plans are “good”
The simple truth of the matter is that all medical aid plans are “good”. All medical schemes in South Africa are registered in terms of the Medical Schemes Act (“MSA”). The Council for Medical Schemes (“CMS”) in turn is the statutory body that is established in terms of the MSA to regulate private health financing through medical aid schemes.
As such, all medical aid benefit options are regsitered by the CMS, meaning that the rules of every medical scheme are consistent with the provisions of the MSA and they are fair to members. Each registered benefit option therefore provides a defined set of benefits in exchange for a pre-determined monthly contribution.
And this is what makes each plan “good” as it allows prospective members to select what level of cover they want in relation to what they can afford. In exchange for a lower contribution members can have lower benefits, effectivly self-insuring a portion of the risk.
It is important to remember at all times that membership of a medical scheme is a contractual relationship. This means that members enter into a contract with the scheme and the terms and conditions are set out in the registered rules of each scheme.
Medical aid value-for-money explained
The value-for-money scenario for medical aid benefit options is a very simple concept to understand. You get medical scheme funding benefits in line with what you pay – nothing more and nothing less.
For example – you either pay a monthly contribution of R7 500 per month per adult, or you can pay R1 500 per month per adult. Whilst both plans provide unlimited hospital cover for most medical conditions and emergencies, the R7 500-plan may provide better out-of-hospital cover for the treatment of cancer, it may cover the cost of some biological drugs, it may provide a higher Rand-value for prosthesis benefits and it may provide some out-of-hospital cover in the form of a medical savings account, to name but a few.
Both these plans will however allow you access to the same bed in a private hospital. Both plans will also cover the costs associated with the in-hospital treatment of the “everyday” accident, illness or disease in the same manner. Whereas the R1 500-plan will cover the costs associated with the basic level of care as prescribed by the MSA, the R7 500-plan will do exactly the same but will also offer “additional” benefits.
You cannot pay R1 500 per month and expect the benefits that are linked to the R7 500 contribution when you need medical treatment. And yet medical schemes are often publicly slandered as “bad” when members (or their doctors) demand treatment to which they are not entitled to in terms of their selected benefit option.
The refusal on the part of the medical scheme to NOT fund benefits that are not provided by a member’s selected benefit option, does not make a medical scheme “bad”. And a scheme is not only “good” when they fund all medical expenses in full.
What then makes a medical scheme “bad”
There are a few things. Bad or inconsistent service, poor administration, high administration fees and poor governance usually make the top of the list as far as “bad” is concerned.
But there are other aspects as well and these are usually veiled at the bottom of the iceberg. Medical scheme members are generally completely ignorant or oblivious to these issues and the media, in general, also doesn’t help much.
Let’s take a look at some these factors:
Medical scheme size, reserves, increases, service
There is a popular misperception is that “bigger is better”. This analogy however is not always relevant to medical schemes.
Some 37 000 beneficiaries of Health Squared Medical Scheme woke up a few months ago to the devastating news that they were to be left without medical aid cover. This was the result of the impending liquidation of their medical scheme.
Regulation 29 to the MSA requires every medical scheme to hold minimum reserves (solvency ratio) of not less than 25% of the scheme’s gross annual contributions. At the time when Health Squared members were left in the lurch, they were the ninth largest open medical scheme in SA. Yet their scheme reserves were sitting on about 2%.
The real size if a medical scheme is in fact not determined by their number of beneficiaries, but by their sustained ability to settle their members’ claims. According to the CMS Annual Report 2021 – 2022, it can be seen that some of the biggest open medical schemes in South Africa were beaten hands down in terms of the size of their reserves when compared to some smaller medical schemes.
Have a look at some of the results from the open medical schemes:
- The largest medical scheme in SA had the third lowest solvency ratio;
- The second largest medical scheme in SA had the second lowest solvency ratio;
- The third largest medical scheme had the fourth lowest solvency ratio;
- Two of the three largest schemes increased their 2023 member contributions by more than 8% per month (ouch!); and
- Two of the three largest schemes scored the lowest in a recent survey conducted by Consulta in terms of their “Net Promoter Score”, which measured the likelihood of their members recommending their scheme.
Food for thought
Medical schemes aren’t “bad” when they don’t settle your claims in full; neither are they “good” when they do. They will always settle claims in line with a member’s selected benefit option and the terms of the contract entered into.
Always do your homework properly. Evaluate your level of cover along with what you can afford on a regular basis. And remember, bigger is not always better.
Contact Genesis Medical
For more information about this article, or to inquire about one of the hospital plans or our more comprehensive medical aid plans, feel free to browse our options below or contact us today.
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