South African consumers are feeling the effects. While some have had to tighten their belts by cutting out luxuries, for many rising fuel costs and the rising cost of living have also meant sacrificing important coverage like short-term insurance and medical aid. or switch from a comprehensive medical assistance plan to a more affordable hospitalization plan.
Multi-risk or “comprehensive coverage” medical assistance plans provide the member with hospital coverage as well as part of the medical savings account (MSA) for a fixed fee or premium each month. The MSA share can represent up to 25% of the member’s total medical aid contribution and corresponds to the member’s money which is made available to him at the beginning of the year to pay for daily medical expenses such as GP visits, over-the-counter medication or a pair of prescription glasses, for example.
The MSA portion of comprehensive plans makes them more expensive than hospital plans. The member is also required to pay the full amount of the subscription each month, whether or not he has used the MSA share. Any unused MSA funds roll over to the next year.
A hospital plan, on the other hand, provides coverage for hospital-related procedures and expenses only. Depending on the member’s chosen option, members can use any private hospital or be limited to one hospital network but at a reduced rate. Hospital plans have no MSA share for daily medical expenses, making them more affordable than comprehensive medical aid options. However, the member must then cover the daily expenses from his own pocket.
Until recently, medical aid members had to choose either a comprehensive medical aid option or a hospital plan. Fedhealth aims to close this gap and has introduced what it calls a “supercharged hospital plan” that also covers some daily medical expenses.
“We allow members unprecedented levels of control over the structure of their medical aid coverage,” said Jeremy Yatt, senior director of Fedhealth. “Our flexiFED formulas are all supercharged hospital formulas, that is to say that apart from hospital cover, they also pay for certain daily benefits of Risk by default. Fedhealth calls them our Unique Benefits.
These daily benefits include unlimited network medical visits; post-hospital treatment up to 30 days after discharge from hospital; take-out medicines; specialized radiology; treatment of trauma in an emergency department; female contraception; hospital dentistry for children under 7 years old; child fares for financially dependent children up to age 27; and upgrades to higher options at any time of the year. This means that members receive much more value than the average hospital plan; a plan that is more like a full plan but at a much more affordable price.
What really sets Fedhealth hospital plans apart from other hospital plans is that they provide members with a back-up facility or safety net. If the member finds during the year that they have a large daily expense that they cannot afford to pay out of pocket or are not covered by the unique benefits mentioned above, they can simply access a facility from which he can fund these day-to-day expenses. Members then reimburse the Plan for the amount they used for these expenses, and not a penny more.
Yatt explains that the intention is to provide members with coverage for unforeseen costs. And only if members access these funds will they have to start paying back the part they used, over 12 months. “This is a total game-changer that gives more South Africans peace of mind when it comes to medical help than they can actually afford,” he says.