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Keep your wits about you when changing medical schemes: Ian Dodds

In his latest client newsletter, Ian Dodds, managing director of independent brokerage Fundamental Investments said that medical scheme members should become familiar with new medical legislation.

‘We are moving to a new model of health management where the most successful medical schemes will be those that have the biggest buying power, and are in the best position to negotiate favourable prices from hospitals, doctors and other providers of services,’ he said.

‘Medical schemes are no longer allowed to exclude the old and sick, but they are permitted to use a range of strategies to contain their costs. These include late joiner fees, general waiting periods, condition-specific waiting periods, savings accounts, prescribed minimum benefits, the use of designated service providers and managed care options,’ he said.

‘Every year, round about September, medical schemes are permitted to re-evaluate their costs, and essentially redesign their products based on the expenses and claims of the previous 12 month period. For the past five years, medical scheme clients have had to accept double digit premium increases, coupled with reduced benefits.

‘The new drug pricing regulations has reduced the expenses of medical schemes considerably, but members have not seen the benefits of this,’ he said.

He urged medical scheme members to be very careful when switching from one medical scheme to another. ‘In certain cases, medical schemes are permitted to postpone their medical risk by imposing ‘condition specific’ or general waiting periods on new clients who wish to switch to a new scheme. It is very important that new applicants understand the consequences of these conditions, and the liability that they are exposed to before they make the decision to switch from one scheme to another.

He said that members of group schemes should also be vigilant, and to ensure that in the event an employer moved from one scheme to another, no members were disadvantaged at the expense of others.

He noted that just at the time people needed help understanding new legislation the government had capped the remuneration paid to financial advisors.