We all know that medical costs can be a real drain on one’s budget, and the prospect of a real medical emergency is especially frightening. The best protection against this possibility is to belong to a good medical aid. To attempt to cut costs by not subscribing to a medical scheme is just foolish, as it is simply not realistic to imagine that you or your loved ones will go through life never having to face a serious medical situation.

However, the cost of medical aid itself can be prohibitive, and especially at the low-income end of the market it is the factor which most often determines whether people will buy medical cover or not. According to the official publication of the Council for Medical Schemes, CMS News (Issue 2 of 2009-2010), the single biggest constraint that prevents people from joining a medical aid scheme is affordability.

There are more than 30 medical aid schemes with open membership to choose from in South Africa, and it is worth shopping around for the best rate, but there are a number of factors to bear in mind when researching the most affordable medical cover.

Prescribed minimum benefits

All medical aid schemes have to provide members with cover for the so-called “prescribed minimum benefits” (PMBs) in respect of almost 300 separate procedures and treatments for life-threatening conditions, as stipulated in the Medical Schemes Act, 1998. In other words, even if you opt for so-called basic cover, you will still be insured against life-threatening and chronic illnesses. It is usually the level of additional benefits over and above the PMBs that determines the cost of membership premiums. The more additional benefits a medical plan provides, the higher the cost of premiums.

The National Health Reference Price List

The Council for Medical Schemes compiles the National Health Reference Price List (NHRPL) annually – this is the list of rates which practitioners are able to charge which will be covered in full by all medical schemes. However, health care practitioners are free to determine their own fees. The reality is that only 45% of specialists charge NHRPL rates; 20% charge 135% of these rates; 30% charge between 135% and 300% of these rates; and 5% charge more than 300% of these rates. For this reason, when your medical aid only covers 100% of NHRPL rates, you (the patient) are responsible for paying the difference between that rate and what the specialist charges.

Some medical aid packages will cover 200% or 300% of NHRPL rates for specialists and hospital procedures, but the premiums of these packages are comparatively more expensive. Patients can save a great deal by opting for a medical aid plan that provides 100% cover, and then utilizing only those practitioners who charge NHRPL rates. Admittedly, it may be easier to exercise this choice in urban areas than in certain outlying regions. Also, you need to phone ahead and enquire about the rates charged by a doctor or specialist before seeing them, and this might not always be possible in an emergency.

Designated service providers

Medical schemes are increasingly making use of designated service providers – networks of practitioners who provide services to members of the medical scheme at agreed rates – in order to keep costs down. If a member elects to use a practitioner who is not a designated service provider, he or she is responsible for the co-payment. The overall effect of using designated service providers is to keep membership premiums affordable for all members.