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Category:
News /
Medical Schemes /
Cape Medical Plan
/ November 2007
Hunt or be hunted, says Cape Medical Plan
A hospital bed is
a bad place in which to discover what you are covered for
It’s what the medical aid industry call “prime hunting season” – the
statutory period when medical aids announce their new pricing for
the next 12 months and their clients are legally permitted to join a
different scheme or change their benefits. Members may alter their
choices between December 1 and 31.
 The
general manager of Cape Medical Plan, Mark Clark, advises: “Look
hard before you buy. A hospital bed is a bad place in which to
discover the facts.”
“Many people simply avoid the real question: ‘What am I covered for
- or what am I not covered for?’”
Clark said: “The healthy will find it easier to change their scheme
than the older and less healthy who will face exclusions from their
new medical aids and waiting periods before they can claim.”
He
believes that scheme members face double-digit price increases or
more while the government is calling for three percent above the
consumer price index (CPIX) which measures inflation. The headline
CPIX annual inflation rate for August 2007 was 6,7 percent. Two
dominant schemes have already announced their increases of 9,8
percent and another of 10,9 percent.
“If
you’re shopping around for a new medical scheme, look behind the
increases, which have to be disclosed, to whether benefits have been
reduced in part or if co-payment has been introduced,”
Clark
advised.
Cape Medical Plan and other medical aids will announce fee and
benefit changes in forthcoming weeks once the regulatory Council for
Medical Schemes has approved them.
Real private healthcare is becoming expensive. As claims and medical
costs rise, many people can expect to pay more for less cover or the
same subscriptions for less benefit. Medical inflation,
traditionally higher than the CPIX, reflects factors that include
hospital and medicine costs and professionals’ fees. These,
Clark says, are not capped.
By
the end of the year many medical schemes have exhausted their
options for absorbing costs and now have to pass them onto members.
“Last year, many schemes dipped into reserves to contain fee
increases. This is no longer an option for most because by law, they
must have a 25 percent solvency ratio –the proportion of reserves to
likely claims. Many larger funds haven’t yet met or are struggling
to maintain this minimum legislated solvency requirement.”
Growth at Cape Medical Plan - a medical aid whose assets are owned
by its members - has been carefully managed to 7 000 principal
members. It met solvency criteria of 161 percent in 2006 and has one
of the industry’s highest reserve levels, some six times the
legislated required minimum.
Clark concedes it is “extremely difficult” for customers to compare
medical aids and their products. “It’s even more difficult than
comparing cellphone packages.
“The industry is complex and traditionally the public hasn’t cared
enough. However, the alternative to being better informed in
choosing medical cover is facing some serious, unexpected financial
shocks.”
Establishing the health of a medical aid is simple: data supplied by
the regulator equips people to make informed choices and if
necessary vote with their feet.
Clark gives a tip: “A general rule to all service businesses: if you
want mechanised service, choose a big company. If you want to be
treated as a human being, choose the small, focused company.”
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
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